Well Frogboy asked for it, so here is one way to beat the AI on version 1.06.
First, pick a meditative sovereign so that you can always research spells.
Two, ignore all spells other than summoning.
Third, in level 1 spells, summon your critter and then research level 2 spells, so that you can summon the level 2 critter.
Pretty soon, you have a wilding, a fire elemental, a golem, a familiar all in one mobile strike force. Level them all up by beating up Level 1 wilderness beasts and you can basically walk over every other fraction.
In essence, what you are doing is rather than research military tech and building and fielding an army. You can very rapidly summon a magical army that no other kingdom can withstand. This magical army can go in and destroy your opponent's cities. While your magical army is doing this, build up some guard units in your own cities and you have won.
The reason this works is that your golem will almost never take damage and thus, it can attack and move continuously because it never needs to rest.
I'd be interested in hearing from others, how they are beating the AI. My hope is that this will allow the AI to be improved.