can you retreat from an incomming attack to avoid a battle?

No. Retreat/Routing only happens AFTER combat.

is there anyway to avoid a battle?

Scare them away with a +2 Defense Order and lots of Support

If you happen to be ahead of the other guy on the Iron Throne track and you have a march order in the region in question, you could just activate that march order and move somewhere else before he has a chance to activate his. Obviously, you wouldn't want to leave a power token behind to maintain control. This move would have to happen on your turn. You could NOT activate your march order after the other player has already activated his and declared an attack on you.

Monsterberger has a good point -- you could also "work out a deal" with the other player: "If you don't attack me there with your first March order, I'll use MY first March order to vacate the territory, and you can have it."