Mormon is referencing the teachings of the Savior when he appeared in Bountiful. The discussion of good gifts, and particularly the relationship between ones visible works and internal righteousness comes from 3 Nephi 14:7-20. Mormon presents the information with only the indication that this is the “word of God.” What is cited is a paraphrase, not a precise recitation of the text. There is an expectation that the congregation will be familiar with the referenced verses, and that they will understand both the allusion and the way in which the original text has been recast in Mormon’s usage.
Mormon uses the example the Savior gave to apply to his understanding of the goodness of the people to whom he is speaking. It is not a generic concept, but a specific reference to this people and their “peaceable walk” as noted in the previous scripture. Mormon is noting their righteousness in difficult circumstances, and that their righteousness shows in their actions towards others. In this case, it shows in their peaceableness in the midst of terrible conflict.