The devs intentionally tweaked the xp gain for killing AI faction units down a while (maybe before beta 4?) ago.  I agree it's a bit too low right now. 

I definitely don't want it to be at the same level as it is for mobs though.  There's more at stake when fighting factions, like control of the map (cities and resources), for instance.

From a realism point of view, it's destroying humanoid armies that should net you the most gold, resources, and experience.  Speaking for myself, I intentionally leave monsters near my territory so I can level up my troops.  It makes no sense that in order to train your troops to be effective against armies, you make them kill monsters.

Currently, the experience from killing troops is negligible.  It's especially vexing on ridiculous, where it is far easier to take out a troll that a level 2 militia, but the troll gives you 30 times the experience. 

Experience should be a straight function of the enemy stats, and not of the enemy level.

The balance would be to slow the level progression of sovereigns at higher levels. The increased experience would balance out from the troop perspective as they get half as much xp and tend to die in battle.

I say xp should be based off the stats of the unit as well, but we have to be careful not to raise up xp levels in the higher difficulties too much.

Increase xp from killing enemy troops.

Can we please have defeated heroes/sovs drop a piece of loot?  It could even be rationalized as that individual's "parole"(an item);

 or ransom (for gildar drop if the hero has no items) for freedom.  That is just fun.

Can we also have an artifact akin to the magic collar that lets us steal a hero during a battle.  Or an item that lets us steal a random item from an enemy sov/champ?

I fought a massive war with Lord Relias last night. A new level 9 champion I had just hired was involved in taking a tough city and then defending it against wave after wave of Relias' troops trying to retake it. It was brutal and each of the 6 stacks he threw at her were rated "strong". After that she went on to battles in 3 other cities at around a dozen battles overall.

How mamy levels did she get from all this fighting? Not one. Not a single level. To me that's just not right. How can you ever level your champions if you're at war all the time and don't have the luxury of running off to find monster lairs with them? I hope they balance this out some more.

Champions should give up at item when they die. If not the items they were carrying, then at least a random item based on their level similar to what you get in lairs or quests. I think they've nerfed loot to the point now where it just isn't very fun since most of what you get is just crap.

I agree, it's annoying that XP pretty much has to come from monsters.  And that loot gained by the Ai is loot forever lost to the players.  To re-ask the question at the end of the original post;  would something like this be able to be modded in?

Loot doesn't come from the items a unit has on them. It is a game modifier done in the xml. So you couldn't mod this in, no. Gildar and XP should be sufficient if the levels are right. But fixing this will open the hole they were trying to close when they implemented it. Winning a single battle in FE often determines the whole war. Since units newly trained are at such a level disparity, the ones that survived getting more XP just makes that worse. I still hope that at least the amount of XP gained from players is moddable, but I have never seen any code for it. It might be something we have to request.