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Yes, early-game it is a good idea to minimize upkeep costs. That means minimize the number of groups, give them shoes to let them move faster, and dock them into nearby city garrisons at end-of-turn. Ardent Mages are average at building up large armies: they don't particularly get any economic advantages, and they have so many techs they "need" to research that they're always scrambling to get to the good stuff.
Around mid-game, as your economy improves, you'll be able to maintain several groups. I like to get Shipyard and then send out 2-4 lone sailors to map out all of the seas and harvest all of those pearls, plus a flyer or two for land pearls.
For wars, the 1st law is group size, and the 2nd law is reinforcements (bring yours, and control/nerf theirs).
- Fill up your starting Zarcha group with 4 combat troops total. (Don't rely too long on those 2 free guys from faction quest chapter 1; they're mercs, and their equipment does not auto-upgrade with eras, plus they're only speed 4.) This is already enough to capture weak cities with only 2 militia.
- Plan your tech path to get one of your unit types. Typically, you go for the tactical role you don't already have. AM has a great ranged unit in Era I Ateshi Zealot, and the best(?) flyer in Era II Eneqa Wing. Choose :)
- Build up a 2nd army of 4 + hero. Shop for a general hero with battle boost capacities. Have these two groups move in a team, close enough that they can reinforce each other. Your 4+4 can beat an AI's 6+hero if you catch it without reinforcements.
Toward the end of Era II (or sooner if you're forced), you will make a conscious big shift to an all-out military build-up. Upkeep is no longer the main consideration by this point; your economy should be able to afford 50-100+ dust per turn in hero + armies upkeep, and still generate a profit. (Late-game, you'll shrug off 1k+ per turn in upkeep, except that you'll happily activate boosters that reduce upkeep costs.)
- Research Meritocratic Promotion to get your army sizes to 6. As soon as that's done, merge your groups to make a doomstack of 6+hero. Build more units and walk them up until you have 6+6. That's enough to outright conquer some AIs. N.B. the AI itself follows this path, and will soon have army size 6 (and size 8 in Era IV), so you'll have to do it yourself just to keep fights even.
Meritocratic Promotion does make each lone sailor more costly, but not by much. The sailor is probably level 3 by now, so you're already paying 3+4 for his army. Increasing that to 3+6 is only about a +25% gain. Put another way, with five lone sailors roaming the oceans, you pay +10 dust upkeep after Meritocratic Promotion. That's like having one of your governor heroes level up. It's a drop in the bucket compared to your other upkeep.
- Also, research Era II Alchemical Armor for the accessories: +2 dust/pop or +2 science/pop for governor heroes, Army Initiative Boost 2 and Army Damage Boost 2 for generals. Equip all of your generals with the army boost accessories. (Some AI groups will do the same thing.)
- As your infantry/support generals level up, take their reinforcement flags skill(s) and extra accessory skill. Then you can overwhelm enemy groups with reinforcement advantage.
For tactical combats, play a lot and you'll figure out the tactics (sometimes by hard lessons).
- Exploit terrain. (Before attacking, hold down right-button and study the battle board.)
- Have a mix of capabilities: high-init cav, tanks, ranged, healing.
- Use your high-init guys to init-lock enemy units. They can trap reinforcements upon their flag hexes, which blocks any new reinforcements from appearing.
- Rotate injured guys into your backfield for healing, or to keep them alive.
There does come a point where your cities run out of improvements to build. Beyond that, there's also a point where your armies are dominant, and you don't feel the need to build any more. Then you can build stockpiles :)