How do you heal?

I think you place your units within one of your towns.

You can heal by passing time in cities (faster) or just in your territory in general (slower). There are also consumables that heroes can use.

Wish I could build a campfire and rest.  Roll % to see if I'm awakened by an ambush.

In my last combat against the spiders guarding the alzor armour (sp?) I missed healing myself four times.  I won, which I was quite surprised about (2hp left at the end of the fight), but the armour up and vanished .

You can research spells later to heal both in map mode and combat mode. The strategic one is a bit expensive mana wise. But still nice to have in a pinch.

I also think you can buy stuff, and medical packs that you can use to regen life.