Not to downplay your post but you should have a look at this thread https://forums.elementalgame.com/404541. The devs have been known to take a look at it.

While I agree that the AI is lacking in the use of most Terraforming spells it does use Curgen's Inferno ( the volcano) on ridiculous settings. In one of my recent games 2 of the AI opponents got wiped out through the use of volcano's by an other AI and as you can see in the below picture it was also using it on my cities

You can see atleast 5 volcano craters here, all of which have been cast by an AI opponent

In that same game I've also seen Gilden use the Tornado spell to scatter my stacks of units. It did miss the tactical knowledge though to finish those scattered units off.

I've been diligently testing the AI this beta series. The last post is here: https://forums.elementalgame.com/407926. I have links to prior test threads in each one so you can follow all the way back to the beginning of this beta. I purposefully didn't test tactical (well known gaps with the AI already) or the use of magic strategically (too difficult to quickly test). Regardless, to me the biggest gaps I've noticed are:

1. Are the factions doing the basics (settling, building improvements/units, gearing champions or upgrading units, etc)?
2. Specifically are any of the factions pop locking (not doing ANYTHING) - this is a major issue to me because the faction is not putting up any kind of resistance. No fun there when that happens.
3. Are the sov's committing suicide, i.e. being blatantly stupid and sticking their neck out. The fact a sovereign is all-important and their faction dies (unlike Civ series where there isn't an all important one unit) if they die means sov protection is more important than anything. Not any fun for the most powerful faction in the game to walk his sovereign into your territory, unescorted, get killed, and his entire faction die as a result of his/her stuipidity. As a player I'm forced to make a decision: do I kill this guy and take advantage of the mechanic or purposely let him/her live so I can continue the game.
4. AI gearing their sovs/champions to best of their ability (based on gildar and tech level) - the spouses currently are nothing more than baby factories. They sit in the capital and don't gear properly. From what I understand the spouses aren't moddable either. If they could be modded, the spouses could at least be uber-geared and act as guardians of the capital at least - a powerful unit that says "player - don't you dare attack this capital until mid game because I'm badass." I think it would help counter the early game rush - capitals couldn't be taken until the player has researched enough magic or combat stuff to take on the spouse. The level of gearing could be based on the difficulty selected. But I digress...

Brad says #3 will be addressed in 1.3. I will keep squeaking about 1, 2, and 4.

to my surprise the AI was able to build heavily protected units with heavy armor on them - difficult setting, beta version 1.19n - nothing that five archers couldn't deal with in two turns

the ai always rush builds lots of individual basic units to get its power rating up, whereas i don't really build a military until i have the techs and income to build something i can be fairly proud of (and know that i'm not going to scrap 50 turns later). i know a lot of people swear by the tactic of spamming a load of spearmen in the early game and wiping out the ai before it can build anything, but i've always thought that sounded like a boring way to play. trouble is, once i've got that semi-decent military, an army of a sov + 2x4 melee troops + 2x4 archers + one summon (usually the demon, with it's free, individual destroying 5-damage-to-everyone spell) can pretty much walk into any city unopposed (ironically, this is also pretty boring, so i guess i just wait longer for my boredom fix).

fixes:

- ai doesn't build groups or archers. their huge armies of individuals are destroyed by area spells and can't regenerate like mine can. my archers give me a better ratio of attacks:counter attacks, because they don't provoke counter attacks. no brainer here/

- ai builds a military and doesn't use it. my strategy of waiting until i've got groups and armour is nowhere near as risky as it should be. a few peasants are usually enough to scare off roaming monsters (and that is how it should be, i like the monsters as they are now), and their military cripples their fledgling economy just so they can extort a few pennies out of me that will make no difference to the big picture.

- teleport allows human players to concentrate their forces better than an ai ever could. this is not because teleport is too cheap, putting up the mana cost is missing the point. if it wasn't for teleport i would never bother with the adventuring side of the game because it would be just too fiddly. the real fix is to make the low level teleport spell affect the caster ONLY, and make a the stack moving teleport a high level spell up there with curgen's inferno. also add a spell that increases the movement rate of an entire stack, not just one unit. now that i would actually use.

- finally, and i can't believe i'm still saying this, LET ME UPGRADE MY UNITS! everyone has been asking for this since day one and i can't believe it's still not even being talked about by the devs. i'm starting to wonder if they've got some philosophical issue with the idea of upgrading units, because we never got it in GalCiv2 either (not properly anyway), not even after 2 expansions. until i can do this i'm always going to avoid building troops in the early game, because i don't want the hassle and lost investment of deleting and replacing them all the time. this absence really works against those who build an army early, because they don't even get to keep the experience they've earned.

The AI is really weak in WOM; it's really the biggest problem with the game.

The AI will consistantly declare war on me, and then completly ignore me and do nothing for dozens of turns while I fight an entire other war on a different front.  If it does attack, it seems to do so with small and weak groups of units, instead of making larger, effective armies.   It also dosn't use resources very well, having a huge stockpile of gold but a weak millitary on the highest setting.  

There are other simple errors it makes as well; I often conquer cities that have the wrong buildings (for example, it'll build the buildings that give a % bonus to metal production in cities that have no metal production.)   As was mentioned, it never makes archers.   In the latest patch, it's gotten a little better at buying equipment for it's heroes and sovereign at least.  

But for the most part, if I've got a couple of monsters coming at me from the south, and a huge empire at war on the north that's twice my size and has an army three times as big as mine, I'll take care of the monsters first.  They're actually a bigger threat then the AI players are at this point. 

The AI just needs to learn to properly launch a single large attack on nearby cities it's at war with, that's the biggest thing.  If it can't do that, then it's no threat at all.