Two opposing squads will fight when they are close together. Additional squads can join an existing battle. The side with the largest number of men in the battle has and advantage so bring as many squads to a battle as you can.
A squad carrying a crown will be twice as strong during a fight. A squad carrying gold will be half as strong when fighting.
The terrain the the squads are on influence the outcome of a battle. If a squad is on higher ground (hill or mountain) it will have an advantage. If a squad is in a castle it will also have an advantage. Squads fighting in water have a disadvantage.
Tap on any squad in a battle to display that battle's stats in the bottom center of the screen. The stats show the number of men on both sides of the battle.