The combat is "phased" by default no matter what you set in the configuration screen. You need to switch to "realtime" yourself every time you leave a town. Otherwise, the combat is phased.
You need not to haste with reequipping, switching spells and so on. You can even level up during combat. Next time try the following: do not move, do not attack, let the baddies attack you. They will attack
once and then they will wait until you take some action. Then they can attack once again. The combat is phased.
Therefore, when your mage becomes active, select a spell for him without hasting, target the monster, and then fire. Your opponents must wait all the time and observe your preparations
Later in the game, the phasing becomes a nuissance because it turns almost all monsters to ridiculous jesters, passively waiting for your killing them. The only dangerous monsters are those that can put an end on you with a single attack - well known salads but also certain stoning monsters or packs of monsters with very strong physical attack and with good chance to hit even a well flashed character (sharks).