Playing on Squire difficulty, I think that you shouldn't be so punished by the AI, if you developped your empire enough. I suspect other reasons than the AI being too smart.
During combats:
- do you fully understand flanking tactics and actions points rules, and use them to your profit, or do you boldly charge the enemy, only to be surrounded and hacked to pieces on the next turn? (see Beginner's Guide)
- do you make use of battle and unit enchantments to boost some units'stats, like making them nearly impervious to physical attacks, etc, and to disable the enemy? Even a T4 unit can be stunned, frozen, entangled, blinded, etc.
Outside combat:
- when a combat is coming, pay attention to the type of terrain where it should stand. Refuse fights on disliked terrain, induce the AI to attack you on a terrain that you like more.
- use strategic spells to boost your troops and economy and cripple your enemys.
- perhaps conquering Independants is enough for good players. Not for me. I have to found several cities whenever I find a suitable spot of land, near resource sites and treasure site that grant my units special bonuses. If you can't win the AI by pure tactical genius, you can win them by economic dominance. Granted, you need time for this to be fruitful (the time an outpost grow to a rich city), but you play against AI.