In occupied South Figaro, use disguises to pass guards.
Walkthrough
In occupied South Figaro, 
Locke cannot walk past every checkpoint as himself. Fight or steal from an appropriate merchant or soldier to obtain clothing, then use each disguise where it is accepted. Speak to the people in town for clues about the wealthy house.
Inside the house, find the concealed route down to the prisoner. Free 
Celes, take the clock key from the sleeping guard and open the passage through the clock. Search the basement as you work toward the exit, then continue through the cave.
TunnelArmr is a useful introduction to Celes’s Runic: when active with suitable equipment it absorbs eligible spells, including friendly ones. Have Locke attack or use items, renew Runic when needed, and heal between the boss’s turns.
Checkpoint
For the disguise route, steal the merchant’s clothes in the item shop and pass the child’s checkpoint. Steal a soldier’s uniform in the northwest, pass the guard near the crates and enter the pub basement. Take cider from the merchant there, deliver it to the old man and use the password Courage with the child to reach the house’s secret passage.