If I may suggest something that may help AI greatly. If AI's were able to 'mimic' what player does in order to make his faction strong it would help him a great deal.
I've said this for 100 years (yes I'm that old lol not), but anyways a database should start to build up of how the human player plays and the ai mimic it in some situations. What's that saying Quid pro quo? The human player is not going to know but it would be fantastic to see an ai mimic the player sometimes and meet him on the battlefield with his own medicine. Plus in tactical combat make the same moves. ooooooh how I'd like to see that.
1) Pick one location with good enough resources and lots of essence for main fort city. Usually as soon as possible, one of the first 3 cities (usually first city) if possible.
On difficulties higher than challenging I'd like to see the AI get maximum city stats when it settles its first city or two. something like a 5/3/1 or 4/3/2 or maybe even a 5/3/2 * random chance it's over the cap of 9. no matter what is actually in the square. Afterall it's a higher difficulty so those that don't play past challenging can't complain.
2) Maximize production of the city, build all unrest reduction and faction/world unique buildings in it that actually boosts production.
On higher difficulties once again past challenging I'd like to see the AI not have to worry about unrest. Crusader Kings did this very well and made the game a lot more challenging by not making the ai play by every rule the human plays by. They did it for the economy also as the ai always had enough money to field armies without worry about upkeep.
3) Cast buffs on it that improve units produced in said fort.
Give the ai maximum defensive units from the start on higher difficulties and improve their stats as the game progresses so when the strong human player gets there it won't be a pushover battle.
6) Separate heroes and give each an army to command.
Not so sure I agree with this I think two heroes or sov and hero is a better set as it gives more selections of more powerful skills to use, perhaps 1 melee and 1 ranged of some type (magic or arrows) would work well that's how I run my armies anyways.
9) Stop random declarations of wars and declare only when ready and able to attack the enemy (no longer DoW-s from across huge map or DoW-s and then sitting there doing nothing or sending one by one unit to get killed).
I would like to see the ai on higher difficulties work more towards alliances with the other ais like in MOM and come after the player moreso than each other. This is the challenge the game needs on higher difficulties.