It's a major bug and kills gameplay for me. I'm looking for a nice relaxed game (On easy, heh heh) and here comes the Ai with an OMG huge army that he can't pay for and doesn't have to.
Spam cities and use your border influence to block bottlenecks... building a pioneer should be your first unit from most cities unless its in a dangerous location with no help nearby. Even a city without any nearby resources can still provide 1 gold per turn, 1 materials, 1 arcane and if you have the gold invest for 1 research. Later on these cities can be at least pumping out squads of peasants and their attack effectiveness will surprise you.