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Personally, in the 5th installment, I consider only two factions to be overpowered: Elves and Dwarves.
They have the two most devastating abilities: True Luck and Absolute Protection (if you don't believe me, try taking castles with the Grail and these abilities...).
Dwarves are already tough, and with the Anvil and the ability, they have free (!) chance to hit = 99% immortality during defense + a hero with magic (if you level them up, a Warlock or Wizard will be as powerful as possible).
The toughest dragon is the Magma Dragon + Lava Shield. This is a nightmare (it's only somewhat mitigated by the inability to resurrect, but at least we have that).
Elves have Wild Luck + Initiative (Wing and Anwen are amazing...).
Ents are competitors for holding Lava Dragons + free 1 resurrection with Dryads (I don't understand the developers' logic; do the Dryads mate with the Ents, so they both resurrect???...).
There's no need to talk about Archers and Druids – with True Luck + a Ranger and a hero like Wing, Anwen, or Ossir, it's game over.
In the third game, I only love two factions: Elves and Elementals.