Best I can tell as one who hasn't seen the movie, the people called "Woads" in King Arthur were either a) one of the Celtic peoples (so: either Gaelic or, more likely, British [Welsh, Cornish]), or b) probably they were the people indiginous to the British Isles known as Picts (Peohtas in Old English). The idea of naming the people after their battle paint seems to have originated from the movie--a fact I have concluded from various reviews, e.g., here, here, and here. At any rate, the word "woad" is not used as the movie uses it in any ancient texts I've seen, and the dictionary only has the "dye" definition. It was the Picts, based in northern England and Scotland, that the British Celts were having trouble defeating when the Brits invited the Germanic tribes to the island to help--though in the end the Germanics helped themselves to most of the Brits' land.