Your router is obedient. It will do what it's told, no matter who's doing the telling. A Smurf attack is a version of a Denial of Service (DOS) attack in which an attacker sends an ICMP echo request to your network's broadcast address using a spoofed source address. This causes all the hosts to respond to the broadcast request, which will slow down your network, at the very least.
Consult your router's documentation for information on how to disable IP directed broadcasts. For instance, the command "Central(config)#no ip source-route" will disable IP directed broadcasts on Cisco routers.
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