I had a professor once who had been one of the earliest soldiers to reach the area near one of the concentration camps (I don't remember which one). Speaking to the local Germans, they said, "we had no idea what was going on." His response was that you could smell the camp from the town.
The locals may have been pretty much oblivious to the actual inner workings of the camps, since I imagine they were kept well away from them by the soldiers. But I personally find it hard to believe that once the crematoria were fired up, that they couldn't smell that for miles around.
