Base Stats

Each race has different base stats.  Amarians (the race of Pariden) have the highest intelligence, Trogs (the race of Yithril) have the highest strength.  The stats are the starting point for the sovereign, champions and your armies.  It will be easier to use heavy armor and weapons if you have the strength bonuses the Trogs offer, likewise your units will have more hit points if they are Ironeers (the race of Gilden) rather than Amarians.

Unique Units

Each faction has ten pre-designed unit types.  These units automatically upgrade as new weapons become available.  There is, for example, one archer unit.  But that archer unit will use the best bow the player has.  Units that are already created can upgrade their weapons armor, though it isn't cheap.

Each faction has three unique pre-designed units.  Tarth has the Clan of the Crow instead of archers.  These unique units always have different equipment or traits and are usually better versions of that sort of unit, though they may take longer to train.

These unique units are our favorites for each of the factions, but you can create your own.  If you want a unit like Capitar's Silver Swordsmen for Yithril then you can create a Yithril unit with the same traits.  Or you can create a new mix of traits for your units.

Faction Traits

Each factions has two traits, one always grants them access to a tech so the factions have different starting techs (and therefor different starting improvements, etc) and the other trait affects the faction as a whole.  Gilden's trait halves the production cost of weapons and armor, Yithril's improvements the Strength and Constitution of their units, etc.

Players can create their own factions and pick from a large number of faction traits and add an additional trait if they select a faction weakness.

Sovereign

Each faction has a sovereign whose traits and weaknesses are as important as the faction itself.  Choose a powerful fighter like the Warlord Verga if you want to go battle monsters toe to toe.  Choose those that gives bonuses to their armies like General Carrodus if you want to improve the champions you find and soldiers you train.  Or choose one of the magic focused sovereigns like Procipinee or Ceresa if you want to rule with magic.

And as with all of the above, you can always make your own.

Kingdom of Altar

Altar is the ideal faction for questing and focusing on your champions.  Relias starts at 2^nd level, making him less vulnerable in early exploration and his Natural Leader trait halves the cost when recruiting champions.  Altarians also get double the experience for completing quests.

Two of their unique units, the Redwatch and the Blades of Athica start with the Potential trait allowing them to gain experience faster than other armies and their Explorer cost more to train than other factions scout, but are much better in a fight.

Kingdom of Capitar

Capitar is made for trade and generating Gildar.  If you can protect your cities then they can afford to pay the wages for the largest armies in the game but you will need to do some work to get there.  Their caravans upgrade roads three times as fast as other factions and are immune to attack.

Carrodus gives bonuses to all other units in his army so even if he isn't a match for the strength of Verga or the spell casting ability of sovereigns like Ceresa, he is dangerous when leading large armies.

Kingdom of Gilden

Armor and weapons cost half the normal production for Gilden players allowing them to keep their armies outfitted in the best weapons and armor.  If Capitar's wealth comes from their cities and trade, Gilden's wealth comes from their sovereign.  Enil Markinn is well known for what he would call pragmatism and although he doesn't start with Carrodus's wealth, he does generate some Gildar each turn and pay less in unit wages than any other faction.

Kingdom of Pariden

The Amarians aren't as strong or hearty as other factions, but they are the most intelligent and therefor earn experience faster, make better spell casters and are more resistant to spells.  Their Destiny's Guard and Magebane unique units carry this protection even further and are the most adept against enemy spell casters.

But the true strength of the Amarian's is in a basic put powerful faction trait that gives them +10% to research, and in their leader, or more specifically in an item their leader carries.  It is Procipinee's Crown, and though Procipinee starts with it she is free to give it to any of her champions.  There aren't any maintenance costs on any spells cast on whoever wears the crown, allowing the player to load up all their enchantments on that unit for free (outside of the casting cost).  Procipinee may not be a powerhouse, but with Anointed by Fire, Nature's Cloak, Stoneskin, Courage, Mantle of Fire and other enchantments on her she becomes formidable.  The more spells Procipinee knows, the more powerful she becomes.

Kingdom of Tarth

Tarth's sovereign Lady Irane starts with a bow, which is a considerable advantage on its own, but even more so because it's an enchanted bow that is +10 attack vs beasts (spiders, wolves, panthers, bears, etc).  She has the Quick trait, which increases her initiative and like everyone from Tarth she has the Enduring trait which gives her +10 to defense when she is under half of her hit points.

The Tarth archers, the Clan of the Crow, are very good and start with a +3 to Accuracy.  Even more if there is a Training Yard in the city you build them in.  While their soldier units, the Firebrands, gain a bonus when attacking higher level units and the Oak Guard start with Throwing Knives they can use to wear down their enemies before closing to melee range.

Empire of Kraxis

Kraxis is the most builder minded faction in Fallen Enchantress.  Their sovereign's Scholar trait gives a flat research amount each turn which early game will be more than the research bonus Pariden gets, but won't stay with Pariden later on.  Instead Kraxis becomes hard to drive out.  They get +10% per city level to city defender's Attack, Accuracy and Defense.  The Unfalling Legion gives a boost to the defense of their entire army, Karavox's Honorguard starts with the Ironskin trait and the Spikes of Krax are a group of highly mobile Spearmen.

They are the turtles of the world of Elemental.  But with the city defensive bonuses even their unguarded cities can't be easily taken (in Fallen Enchantress every city gets some free defenders, how many depends on the city level and improvements in that city).

Empire of Magnar

If Kraxis are the turtles, then Magnar are the cockroaches.  The start with the Slave Lord faction trait which allows them to feed more people from the same amount of grain, growing larger cities.  And when they raze cities half of that city's population is transferred to their capital.  Their unique units cost less than other factions, and tend to be a bit weaker as well.  The Dross Archer costs less but has less hit points and dodge.  The Scourge are decent mid-game melee units but have a lower accuracy and initiative.  Finally the Outcast unit is a cheaper version of a Pioneer.

Magnar III is their sovereign and a powerful spell caster.  He starts with the ability to use Fire and Death magic.  His Evoker trait increases his spell damage and his Attunement trait gives him free mana each turn.  He can cast Flame Dart from the beginning of the game and after a few levels (especially if he chooses the Path of the Mage) he can be throwing Fireball's that make it obvious why Magnar doesn't need elite troops.

Empire of Resoln

Resoln is led by their Sovereign Ceresa.  Like Procipinee and Magar, she starts with the Attunement trait that gives her free mana each turn.  Unlike the others she also starts with an item, the Staff of Souls, which gives her mana whenever she kills an enemy.

The Wraiths have the Death worship faction trait.  That gives them access to four unique spells if they have casters who are proficient enough in Death magic to cast them.  Infection spreads any negative spell effects on the unit to all other units in its army.  Corruption turns a shard into a Death shard.  Graveseal makes any attack against the infected unit a critical hit and the Dirge of Ceresa does damage to all enemy units and then follows with poison damage every turn.

Resoln's unique units are the Sentinel's of Hagudst, which get a bonus vs spells.  The Tide of Teeth, which are warg riders that get a  bonus against higher level units.  Lastly the Gravewardens have a trait that grants the player mana whenever they kill an enemy unit.  Not as much as Ceresa's staff, but enough to fuel their spells.

Empire of Umber

The most bestial of the factions Umber is able to build camps on defeated Naja, Ophidian, Drake and Forest Drake lairs and begin training these units for their armies.  Expect to face a hodgepodge of monsters and Urxen soliders when you go to battle against them.

But even their soldiers can't be considered civilized.  The Carrion Men are berserkers that get significant bonuses to their Strength and Dexterity when they are under half of their hit points.  The bloodthirsty Marrowguard are warg riders that get a bonus vs injured units and the Najaborn are spearmen that have taken to coating their weapons with poison.

Their Sovereign, Kul-al-Kulan, is well rounded with access to three types of magic and decent stats for melee.  Although he won't be able to beat Verga in melee, be a better spell caster than Procipinee, or give the army bonuses that Carrodus does he can fill any of those roles depending on the choices made as he is leveled up.

Empire of Yithril

The Yithril sovereign Verga is the worst at spell casting starting as a meager Death and earth disciple.  But what he lacks in spell poser he makes up for in muscle.  The Trogs already have the highest strength, but their Powerful trait drives that even higher, giving them +3 to Strength and +2 to Constitution.  On top of that Verga starts with the Might trait which gives him +1 Attack per level, Hardy which gives him another +2 to Constitution and halves damage from poison and a set of enchanted gauntlets that improves his defense.

In playtesting so far Verga has been nerfed more than any other unit, faction, spell, etc.  And he is still a force to be reckoned with.  If he shows up at your gates in the early game, it's going to be a tough battle.  If he shows up with a few levels and a magical weapon, run.

The Trog soldiers take after their sovereign, preferring strength over subtley.  The Harbingers of War are late game melee untis that wield huge mauls and get additional Accuracy and Attack bonuses against anyone with a lower strength than them, and that’s most of the units in the game.  The Battleborn are reliable midgame melee units that start with a bonus to Accuracy to help put that Trog strength to work.  The Gray March are spearmen, but very large versions of them.

Or, you can create your own faction and sovereign.