This world is divided on dharma and all are involved in fighting for their respective dharmas. In this fight of dharmas, many people lose their lives, families and sometimes get punished in this world. How does dharma protect these people as per the sloka dharmo rakshati rakshitaha? I understand what shloka means but what is its relevance in this kaliyuga, how is this justified in this yuga.
The verse of which " Dharmo rakshita rakshitah" is a part is found in Manu Smriti.
We need to understand the context in which it was said.
The following is the translation of the full verse.
Manu Smriti 8.15. ’Justice, being violated, destroys; justice, being preserved, preserves: therefore justice must not be violated, lest violated justice destroy us.
This verse and the adjoining verses are discussing how the king's judgement should be impeccable in the court of justice. So, it's basically about courts, witnesses, judges, justice and the king.
The following verses should give you an idea about the context:
8.12. But where justice, wounded by injustice, approaches and the judges do not extract the dart, there (they also) are wounded (by that dart of injustice).
8.13. Either the court must not be entered, or the truth must be spoken; a man who either says nothing or speaks falsely, becomes sinful.
8.14. Where justice is destroyed by injustice, or truth by falsehood, while the judges look on, there they shall also be destroyed.
So, it is so easy to misinterpret the verse without knowing in which context it was said.
Coming to fights and deaths that result from inter-religion clashes, then those in no way prove this verse to be false.
Those people might be fighting for their own Dharma but what's the guaranty that such a Dharma is the one which is defined in Manu Smriti as Dharma? It is not actually.
As Vālmīki notes in his Rāmāyaṇa, the notion "dharmo rakṣati rakṣitaḥ" (dharma protects its protector) in its traditional sense doesn't always hold true.
Rāma himself realizes this when Sītā was abducted and feels helpless. Speaking to Lakṣmaṇa, he says:
sughora hṛdayaiḥ saumya rākṣasaiḥ kāma rūpibhiḥ || 3-64-51
hṛtā mṛtā vā sītā hi bhakṣitā vā tapasvinī |
na dharmaḥ trāyate sītām hriyamāṇām mahāvane || 3-64-52
The highly stony-hearted demons that are guise-changers by their wish have either abducted, or killed or gluttonised saintly Seetha... but, they say that rectitude saves such saintly persons... yet that rectitude has not saved Seetha while she is being abducted in great forest... [3-64-51b, 52]
Commentary: Dharma or Righteousness does not go on safeguarding either its adherents or antagonists, everyone, everywhere, everlastingly. dharmo rakshati rakshitaH and suchlike sayings are also time-bound and when the time is negative, aapatsu raksha ko dharmaH, 'in difficulties which rightness safeguards?' is the ensuing dilemma.
O handsome one, those demons can change their form at will and are of dreadful nature. Have they abducted or devoured or killed her in this great forest. Even her righteousness could not protect the helpless Sita.
Commentary (Tattva-dīpikā): There is a maxim "apatsu raksako dharmah" (Dharma is the saviour in a calamity). Rama says that even Dharma did not save Sita when she was kidnapped.
(In the Critical Edition, this verse belongs to Araṇya-Kāṇḍa, Sarga 60)