I have a lot of thoughts and may not have time to post everything so I might have several posts in this thread.

Combat

The combat system as it is, is unbalanced and lopsided.  Generally the larger the stack the more powerful but to the point of being untouchable.  If you have a hero with an attack of 20 and you have a stack of troups with a defense of 80 that hero will not be able to touch that stack.  This is just wrong....

I think the combat system needs to change a few things.

Stats

Weapon Damage - is the amount of damage an attack does with that weapon

Attack - the chance that the weapon will hit during an attack

Speed - the speed or attack and effects the ability to dodge

Defense - The counter to attack, how hard to hit you are.

Mitigation - Affects the % of damage that is absorbed by armor. 

Inteligence - damage from spells

wisdom - mana pool and resistance to spells

agility - affects speed and defense

strength - affects damage from melee attacks

dexterity - affects attack from missile weapons

life - number of hitpoints unit has

Melee combat

So when two units fight with a melee attack you compare attack to defense.  Maybe something like attack+(attack*rnd(1)) compared to defense+(defense*rnd(1))  

Once an hit is established you do weapon damage - (weapon damage * %mitigation) to determine how much life to loose.

So weapons and armor are balanced with these stats plus the actual stats of the character.

A weapon will have a speed, attack, damage value.  Melee attack is based on weapon attack + strength bonus + speed bonus.  magic weapons might have random status bonuses.  Better weapons might have higher speed for maybe a light weapon but less damage, or higher damage but slower speed for a large heavy weapon.  Magic can add stats and other bonuses.

Armor might lower defense the heavier it is but increase mitigation.  So a soldier wearing cloth might have a high defense being able to dodge more easily and avoid attacks while a heavily armored opponent would be harder to damage mitigating damage.  Agility would give a bonus to defense allowing an agile opponent to dodge more attacks.

Ranged combat

Attack here is based on the dexterity and the weapon.  Ranged weapon damage would be somewhat lower.  Ranged attacks against heavily armored opponents might be largely ineffective.  Moving during a turn and doing an attack would have a penalty to attack.  So archers are best positioned at range and protected.  Heavy armor should decrease attack values discouraging making heavily armored archers.  

Magic combat 

This is an area that is pretty weak in the game.  We should be able to make magic units as well as melee and ranged units.

Magic attack is based on the spell power which is affected by intelligence.  The only defense from magic is wisdom and magical defenses.  Defense stats and mitigation have no effect on magic.  Wisdom provided a spell defense like the defense from armor.  Items can also impart resistances to magical effects.  So maybe a ring of fire resist might give a 25% reduction in spell damage.

magic attacks like ranged attack have a need to be motionless to make their attacks.  Magic attacks should have a duration or a time it takes to cast the spell.  So the most powerful attacks might require that the magic user take 6 movement points.  So If the mage had 3 movement points per turn casting the awesome fire maelstrom spell might take two turns to complete.

Heavy armor interferes with spell casting, so the heavier the armor the slower the caster is at casting spells and the spells suffer a chance to fail and do less damage.  Having a heavily armored offensive mage would not be effective.  Being heavily armored and casting environmental, bufs, curse type spells might be ok but they will take significantly longer to cast.

I think that this type of thing would be balanced to make each attacker type most effective against one and weak against another.

melee is strong against archers but weak against mages

archers are strong against mages but weak against melee

mages are strong against melee but weak against archers

I think this system also balances out stacks.  For a stack you would not add attack and defense values so a hero with top armor and weapons against a stack of pikeman would probably have a better chance to hit them but the pikeman stack would do significantly more damage.  Since a stack is hitting with 8x damage vs the hero with just his one sword.  However heros would have better equipment, magical items, etc that they gained from quests or maybe from killing rare monsters.

On the area of game play

Killing monsters and doing quests should be a much bigger part of being a hero.  In the game currently their isn't really any rewards from killing monsters and doing quests are pretty far between and few.  These things should be enhanced greatly and be the vehicle for a hero to evolve by obtaining equipment and weapons that make the hero better then the average unit.  This kind of variation would be part of what sets the game apart.  I'm thinking a bit like heros of might and magic.

City building needs a lot of work, it is pretty confusing how one builds a city and there is no structure to it.  The city doesn't really evolve as you upgrade it.  It should graphically go through more dramatic evolution.  As I grow from having a small village to a large castle.  I want my city to have a large awesome castle In other games with city building their are things called wonders which take a lot to build but are unique in the world.  When you gain access to one you know it and they are clearly identified in you list of things to build.  We need a similar thing in this game.

The whole city building, technology thing in the game is pretty much there it just needs refinement and a better user interface.  You might consider balancing the types of units, resources and things the city can make against the types of buildings it has.  So making troops wearing metal armor requires that a city have metal resources or trade with another city with metal resources.  Also it requires that the city have an armorer.  In other words the types of units a city can produce is restricted to the types of industry and training facilities available in a city.

I'm running out of steam and this is a long post.  Hopefully someone reads this or maybe similar comments.  I love the concept of elemental and the basics.  but the game needs a lot more work before it is as fun as it could be.