The Black Fortress (1988)

Original title: Die schwarze Burg

When Martin returns from war, he finds that nothing is the way it once was. He watches a few remaining villagers leave offerings in the town square for a giant monster, and he sees that whoever has nothing left for the monster is turned into stone. To make matters worse, Martin finds out that his fiancee, Maria, is being held captive in the monster's Black Fortress.