I upgraded a city to a Fortress, built a Castle in it, and had 9 units stationed in it (that's in addition to the units provided by the Castle improvement) because some very strong armies were wandering around it.  That's a lot of troops, and apparently too many to fit in the city's tactical battlefield.  Half my army was in the black area, unable to move.  Some of them were archers, and with the enemy not having archers, my victory was ensured, because my archers could still attack, but the enemy couldn't get to them.  The problem would've been worse had it been a Watchtower, because then I'd have catapults in there as well.  

A new city battlefield is needed for when an army is this big.  Either the existing one needs to be expanded, or the program needs to pick its battleground based on the number of units that will be in it.