Watched it around end of 80's - beginning of 90's.
It's about two nations constantly fighting each other. One lives in a valley with huge levee, another in a forest. Those from the forest are the "evil" ones, if I remember correctly. Also, there is an airship flying at night, with souls of the dead people, and all those souls look like birds. The protagonist lives between the two fighting nations, together with his wife or sister (don't remember exactly). At the end he helps the forest guys and destroys the levee. His wife/sister dies as a result.