Worshipper – “Conquest” [Campaign 2, Mission 3]

This is a secondary quest – you don't have to complete it. I won't argue, as I didn't complete it myself. Perhaps you're right that completing it will result in the Elves having a weak army. I probably wouldn't be able to defeat the main enemy with just Agrael. I played through it twice – both times, a hero – a druid hired in the tavern – weakened him significantly. In the second playthrough, he managed to level up to almost level 10 by fighting neutrals and had a full set of units.

This problem is solved with time. Agrael didn't lead demons (they were only used to capture the nearest Sylvanis), but directly led the Elves. He captured the first Castle, and with the remaining demons and dryads, he cleared the mines and resources (there were problems with mercury because there weren't enough forces for Phoenixes yet), and with wood – Sylvanis consumes it in huge quantities. Then, we build up an army (the green faction doesn't attack yet); it's better to build a Dragon Roost than upgrade units – it will be easier later. We give Agrael logistics, and when Gilraen arrives with an army that we can't break through, we run away from him, depending on where he comes from, either clockwise or counterclockwise. It's better to go counterclockwise, but clockwise is also an option. The main thing is that there are no creatures left in the Castle – then, as long as he has at least one Castle, he won't touch the captured ones. This way, we capture the second Castle in the corner of the map (it's better to go counterclockwise because the capital is usually in the right corner => Capitol, which we don't have, and the path to the Castle is shorter – in the left corner, when capturing, Gilraen might catch up). This is how we run in a circle. In reality, you can capture the third Castle on the n-th circle, and it's desirable that the closest one to Gilraen is our first – there is no Castle there => less growth and no Capitol either. As we run, we take troops from the Castles, and sometimes you can cast the summon troops spell, but I didn't have enough mana for all of them. And so, gradually, we accumulate a decent army that we can use to fight Gilraen. Keep in mind that the sooner he comes to us and we start running away from him, the less we will have to run.