I have played 4 games with the demo but no other versions of Warlock so I don't have anything to compare to, but it's either easy or normal, leaning towards easy I think. I say that based on the rate of expansion of the other grand mages - there seems to be only benefit to building more cities, however areas around the AI players remains unsettled for a long time. The tactical AI seems very good however, the many neutral creatures are aggressive and also retreat in a sensible way a lot of the time. I've only seen a little bit of war with the AI but it was enough to see them attack with groups of units and be prepared to mass retreat to preserve them when the tide turns. What I saw there was good so far.
I have really enjoyed the demo, it's more replayable than some full games and I am all preordered up now!