Where have you read they practiced human sacrifice, and why do you assume it was Roman propaganda? The Roman's themselves practiced human sacrifice from time to time, so a Roman slandering someone with that doesn't exactly make sense to me.

Yes they did/could have/probably did. There is a caveat to this, in that it's not always clear what is ritual killing and what is excarnation ritual.

Iron Age Britain doesn't exactly heave at the seams with human remains, and the general suggestion is that IA Britons cremated and scattered human remains, although David Harding is probably a good counter-charge to that. So there's not a massive dataset to work with. However there are some possible killings - the Lindow Man (and Woman). At Alveston, Mark Horton has suggested that there was ritual cannibalism. Archaeologists at Duropolis reckon there may have been ritualized killings. Ann Ross suggest a the South Uist burial is a ritual killing, and Aldhouse-Green points to a number of Iron Age attendant burial killings (where you're killed and buried with somebody important). The reason why these examples are suggested to be sacrificial is that they suffer from overkill - an abundance of types of damage to the person. So the Uist boy has sharp weapon damage to 20 of his vertebrae, the Lindow man was strangled, smashed in the back of the head, had his throat cut, and ha; a number of other wounds.

Those who disagree with the sacrificial role will interpret these as subsequent to death, and there may be merit in that, but there's enough of these to look suspicious all the way across Europe (check out Aldhouse-Green on that).