You've said what you did and what happens, you haven't really said what you wanted or expected to happen. So I'm guessing: perhaps you wanted the template rule in XSL1 to be applied to the <people> element in XML1, and the rule in XSL2 to be applied to the <people> element in XML2?
This would happen automatically if XSL1 and XSL2 have the same import precedence, or of XSL1 has higher import precedence. So it all depends on how you arranged the xsl:import declarations, which you haven't shown us. Perhaps you did
<xsl:import href="xsl1"/>
<xsl:import href="xsl2"/>
This would give XSL2 higher precedence which would account for the behaviour you are seeing.
You could fix this by changing the import order, or by changing the template rule in XSL2 so it only matches a <people> element at the outermost level: match="/people".
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference