Have you noticed the yitril soldiers with Kwarizarm (whatever that sword is). This sword costs 2275 in the item shop which maket it impossible to get pre-midgame imo, but I've noticed it's fairly common on yrithril soldiers. The game I played now had one guy hit & kill my fire giant on the second round. I'm assuming the AI is arbitrarily beefed up on Ridiculous settings with additional gildar becaue I have no idea how they could even equip one guy with this sword at 2275 much less 3 or 4 ... unless I'm completely missing something from this game? I can take these guys out, but usually need deflect, that extra magical damage bonus for this sword is crazy. I think it only applied on the first attack though.

find fire node, hit him with 2 fireballs, he's dead. repeat

Having a huge defense means nothing in this game with such a low Health pool. 15 hits is one spell sometimes

One of the recent patches put back in territory bonuses. You get a 25% bonus or penalty for being in friendly or hostile ground - this is mostly across be board to attack and defense. Stack this with a few armor pieces, you can be pretty good.

Though that early, it's likely to avoid making the AI -too- easy to conquer as it's not like - spells currently not withstanding - the AI has a lot of options and smarts to tough it out.