The Knight provides an oddly specific set of requirements for what constitutes a "peasant" (wearing a robe, stinking, and being on fire), with explicit rules that only people who meet those three criteria will be considered "peasants" and be allowed to enter Trogdor's lair. In the movie trailer, we also see the King of Peasantry displaying extreme opposition to Rather Dashing's plan to get revenge on Trogdor, claiming that they have "co-existed" with him for centuries.
It is also indicated that Rather Dashing is probably not the first peasant to want revenge on Trogdor, but he has gotten further than anyone before him (as in actually making it to Trogdor's cave and confronting him directly). This is probably because he was the first peasant to actually meet all three requirements.
Perhaps the real reason for keeping peasants out is because the King knows that Trogdor can't be killed. Given Trogdor's reputation for burninating random peasants and their cottages the King probably knows that peasants will inevitably try to get revenge, but also that such a quest will be futile and only get them killed.
This is where the notion that revenge is restricted to "peasants" comes in. The three rules of stinking like a peasant, wearing a robe, and being on fire were probably constructed on the assumption that no peasant would ever be able to meet all three requirements at once (even if they managed to stink and wear the robe, no sane peasant would light themselves on fire, and anyone who actually was on fire would be in no shape to take on Trogdor).
This is also why the King was so opposed to Rather Dashing going to Trogdor's lair for revenge. He was probably trying to A) keep Rather Dashing from getting himself killed doing an impossible task and B) making sure Rather Dashing didn't end up angering the Burninator and provoking him into making things even worse for the people of Peasantry.
Unfortunately Rather Dashing proved way more determined than the King or the Knights ever expected, and unlike most peasants no amount of insane rules was ever going to deter him.
