Squirrel is a non-hostile critter. Squirrels mostly appear in wilderness but can also be spawned as a side effect of Wild Mage spell.
Locations[]
These rodents are seen in many outdoor wilderness areas, and occasionally inside villages/towns as well. They are found throughout the game.
A target that is Polymorphed into a squirrel, such from the Bolt of Polymorphing, or the Wand of Polymorphing is in really bad shape from a survivability standpoint. Practically any damage will immediately slay the creature.