Hey I'm back! Part 2 might have to wait till tommorow because I have to go rake up 9 trees worth of leaves. But I do have time to continue the discussion a bit. There are a lot of good points raised and some of them are things that I slated to explain in the second half.
I think greater focus should be on morale and effectiveness(training) of the troops.
Yes exactly. Equipment is important for sure, but the knowledge to use and improvise with the equipment you have is whats going to get you through a fight. Different damage types allow our soldiers to use thier weapons in different ways depending on the situation. Your typical wood splitting axe can be used as a hammer by turning it around to the flat side of the head. This is a tactical option and I can see at least one situation where it would be helpful. Lets say you had a 2 handed axe and your opponent had a wooden shield and a shortsword. If you simply hit his shield with your ax the blade might get stuck and leave you vulnerable, so instead you hammer the shield with the flat side and try to break the arm behind it.
The fighter is the deadly part, not the weapon.
Everyone take note, nothing I can teach you here will matter unless you also understand that one sentence right there.
So, a weapons table based on individual weapons instead of damage type would be better imho.
Yes that is the key. We do not need to have complete control over every single thing. But those things have to be there to begin with. We need a SIMPLIFIED system, not just a simple system. Its not enough to assign a damage type to a weapon because all weapons are capable of many damage types.
I think, while weapons and armour type will vary in value, as will the material they are made of. Their differences can be developed to be alot more interesting and unique than an elaborate varied that how GC handles combat.
Yup, each piece of equipment is a combination of its design and its material, but its performance in combat depends largely on the user.
For sure gameplay is more important than realism. But the light/medium/heavy armor type is just ... not so good. the plate armor isn't the alpha and omega of armors. It has huge drawbacks, and only very well trained warriors could use it effectively.
When I get to talking about it in detail I might have to make a new thread because no other armour type even compares to full plate armour. Even partial plate armour functions differently.
Players can understand that polearms are more effective against calvary than they would be in close quarters combat against infantry.
That gave me an idea. Let me explain:
If I was writing tooltips for your in-game interface I wouldn't just sum up pikes as "first strike" weapons. Instead I would mention that pikes are defensive "rank bonus 4" and "reach 4" weapons on the unit info page. The basic game tutorial would teach you the meaning of these and why it makes pikes such a good anticavalry weapon. The actual in game mechanics are complex and are only taught in more advanced tutorials to prevent the game from overwhelming the player with information.
When you get down to the gritty details it works like this. "Reach" weapons can hit people 1 quarter tile away, per level of the bonus, so with Reach 4 your front rank can attack anything 1 tile away. Units with non reach weapons can only attack enemies within arms reach. This means that anything attacking your pikemen will have to fight thier way over 1 tile of ground before they can start hurting the enemy. "Rank" bonuses are different. Normally only those soldiers in the front line can hit the enemy. The enemy must get "stuck in" and push past or defeat the front rank before the second rank can hit them. A bonus of Rank 2 means that the soldiers in the second line can reach pastthe soldiers in front of them and attack anthing in melee with the first line. If an enemy reached the second rank people in the third rank could hit him and so on.
Under this system spears would be reach 1 rank 2 weapons which means that the front rank can attack enemies just far enough away that they can't hit back. If they enter melee with the front rank, then the second rank can fight with the first rank. So you can see the considerable bonus that spears have when deployed this way.
If reach weapons with a bonus of 2 or higher such as pikes are involved the rank bonus means something else entirely. If you fight your way past one "rank" of reach 2 weapons, those weapons can no longer hit you. So anything that gets past the speartips of the first line of weapons will be only 3/4 of a tile away from the front rank of soldiers and will then have to contend with the second rank of speartips. If the attackers make it all the way to the front line, those pikemen will have to drop thier pikes and pull out secondary weapons. While they engage in melee up close they would be defended by rank 4.
This is a relatively simple system (and upon rereading it, full of holes) but you can see how all of this complexity can be conveyed with two words and two numbers. Considering that under such a system charging enemies can be killed on impact by reach weapons and never even touch the people who hold them, pikemen would be anticavalry supreme, and NOT because they have some sort of abstracted "first strike" ability.
How one could want rock, paper and scissors in a tbs is beyond me. It's my goto genre when I want deeper strategic (& tactical, to an extent) management.
How much realism do we want in our games? Only enough to be fun! 
Something I wanted to bring up is fire arms. In fantasy games people tend to lean away from fire arms, and I understand why. But at the same time getting primitive fire arms can sometimes still work.
They sure can. I once debated for many pages on how firearms could be implemented into Dwarf Fortress. The key to getting them right is the word "crude". Early gun tech is nothing like the machined rifles we have now. Crude guns and explosives are insanely dangerous and expensive to make and tend to explode in the users face even if everything else goes perfectly well.