I'm seeing about the same (hard difficulty). Magnar had a single city (lvl 4) surrounded by mountains with only a narrow entry (dunno if he created that or not -- if he did, very cool use of Raise Mountain spell!). He sent out a stack of ~half a dozen fairly tough spearmen from his mountain fortress area just before I declared. I assumed his stack would turn around to attack my attacking stack, but it never did even though it could have engaged me before I reached his capital. He had a half-dozen pioneers (not stacked, but most in one square) just sitting there immediately outside his city, and only 2 troops plus his Sov in the city (and Sov was at half health).
Enemy AI needs still needs to:
-produce fewer pioneers (need to cap the number in existence at the same time (this would allow building more as they're used up in creating cities, but not waste resources building more than can be reasonably used). Two or three max, one mimimum, would be a reasonable number.
-Whatever script that wandering off stack of spearmen was following ('explore' or 'monster bas'h or 'garrison new city site', etc.) should have been stopped and a new script chosen (with emphasis on ones like 'defend capital', 'attack nearby enemy stack', etc.) when I declared on him. AI needs to revise its scripts to better address changing situations.
-don't send off a relatively big stack of troops, leaving a much smaller number to garrison a city --especially a capital. Build a 'necessary' strength stack (both in numbers and equipment appropriate for that stage of the game) and keep it for garrison duty, then any 'extra' troops would be sent out for other purposes. An AI civ that's prone to risk-taking and aggressive strategies would tend to send off more troops, keeping a smaller garrison, while AI civs that are conservative would keep larger garrisons. Still, no AI civ should leave its only city so poorly garrisoned that its survival is endangered, without at least a very good reason to do so.
General impressions from someone who started when pre-release beta began and stopped around 1.06, and just started again with 1.09r -- game is very much improved, and is fast becoming the game I originally envisioned when I first started following things a few years ago.
All the hard work the SD crew has done since release shows.
Nicely done, one and all!
Take sufficient time off for the Holidays, you've earned it.