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I designed the battles with small squads of 7-8 units because, firstly, Age of Wonders is one of my favorite games, and secondly, I really enjoy tactical gameplay, and I like to plan actions down to the smallest detail. There were simply amazing tactical possibilities in that game.
However, I am also happy with all the options listed below the selected one, as long as the focus on giant armies doesn't overshadow the tactical aspect and turn the game into an endless stream of sending new and new hordes of units to their doom.