Renaissance mod does a lot to improve the challenge provided by the base game. This discussion outlines many of those changes in detail.

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At higher difficulty levels, the AI generates extra resources based on a percentage of what it naturally acquires. The higher the difficulty level, the more resources it gains. At the highest two difficulty levels, it essentially has unlimited resources.

In addition, the higher the difficulty, the more likely it is that random events trigger which help the AI. Some of these events are one-shot gifts of high-tier units -- like a dragon or a hero or an elite unit. Other more rare events are game-changing and faction-wide -- like giving all of the AI's units permanent flight or a nice damage buff.

The timing and nature of these events always fits the stage of the game. For example, in the early game, the AI might get a minor buff -- a permanent +10% spellcasting perk or a free settler. Later in the game (typically not before turn 80), they'd be more likely to gain those major game-changing faction-wide buffs.

So as a higher-level difficulty game goes on, the AI will acquire more and more of those major buffs so they become a true powerhouse. This allows them to effectively keep up with what a human player can achieve through traditional game play.

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Because there is such a spread of experience levels among players of Renaissance Mod, the difficulty levels have been shifted to provide a better challenge to more experienced players:

This plays more like a hybrid of the base game's relaxed and casual modes. The AI produces half of the resources it should and does half damage. No special AI-boosting events will ever trigger at this level. Additionally, the player generates unrest a much lower rate (-10 to base).

This is the quintessential begginer-friendly mode. It's quite forgiving.

Casual plays a lot like the base game's normal mode. The AI gets no additional resource help, but also incurs no penalties, aside from a slight damage debuff. It may rarely trigger a minor AI-boosting event, but definitely not a major one. The player generates less unrest than usual (-3 to base) which makes managing their own empire a little easier.

This is an ideal mode for those familiar with 4X games, but new to the world of Warlock.

This plays a lot like a hybrid of the base game's challenging and impossible modes. The AI gains extra resources, but not so excessive as to be unlimited. You'll likely see the AI with a few high-tier units as the game progresses. It might even gain a single major faction-wide boost, but that shouldn't be until the very late game -- perhaps 150+ turns in. Player unrest generates at the normal rate.

This is a good starting mode for those who have mastered the base game of Warlock 2 without Renaissance Mod. If you're new to Warlock 2, casual mode is probably a better fit.

Things pick up on a lot on challenging. The AI has close to unlimited resources on this level, though it takes a little longer for that to kick-in. AI-boosting events trigger regularly, though not at a level that's unmanageable for experienced players. The AI also receives a slight damage increase and a bonus critical strike chance, as well as a slight decrease to unit and building production times. In addition, the player incurs a minor unrest penalty (+1 to base).

This mode is not for the faint of heart. It provides a serious challenge to all but the very best Warlock 2 players.

It's all in the name -- impossible -- which is what this mode was designed to be. The AI has unlimited resources nearly right off the bat. They receive a modest damage increase and critical strike % bonus, plus reduced build times for units and structures.

Early on, they'll often gain free settlers and empire-wide population boosts. Between roughly turns 30 and 75, they'll regularly get free higher-tier units. After that, they'll begin to get those major faction-wide buffs (all of which stack). Meanwhile, the player must navigate around a hefty unrest penalty (+3 to base).

This mode provides the best challenge possible to highly experienced players.