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I believe that Inferno is the most versatile faction in Heroes 5. You can successfully play against any race with it. You can also tailor the unit upgrades to any faction, and there are enough combat and magic skills... Once, I played a "one against two" game on the "One vs. Two" map, using Inferno against two players in an alliance. One of them chose Inferno as well, and the other played as Necropolis. In the second week, a demon appeared – I saw that he had a decent army – so I bought as many Succubi as I could afford, and also some Hellhounds and Fiery Horses, and went after him. While I was chasing him, the Necropolis player ran up and captured my only Castle. Luckily, I had maxed out my logistics skill, and there was a fort on a hill nearby – I upgraded the Succubi to Demons and went to retake the Castle. It was a tough battle; I only had 3 Fiery Horses left...
In short, I had to run around a bit to upgrade the Demons and Succubi. Against the Necropolis, Imps + Chaos Magic, Cave Beasts, Wide Gates, and quickly opening the gates also helped. Against Demons, luck and fast troops work well; the hero's Demon didn't have time to use magic. It would also be good to learn Weakness to Darkness and Darkness Seal, but I didn't learn them.
In general, you need an individual approach against each race.