I wouldn't call this an exploit really, just a badly designed and very overpowered unit. My suggestion is to remove the AOE and make their ability single target only.

The fact that the soverign/champions never have good hitpoints like large unit groups makes the imp power too strong. The power to crush enemy spellcasters before they can cast back only damages an already limited magic system.

It is certainly a bug with the infinite area, always ten damage regardless of defence, and it can be used against creatures like darklings meant to be immune to offensive spell targeting.

Tend to agree.  Single target damage or reduced aoe damge to 3 or 4. 

I think for game balance, there should be stacking penalty for invoking same spell multiple times. That way people are encouraged to use different spells each turn, or at least pick different one after 2nd or 3rd time. It would encourage variety and reward people who have wide arrangement of spells.

I used to agree that the vigilant demon was way over powered, and then I went up against them with an actually powerful group of units. The average hp of a party is around 20 to start and by lvl 3-4 is up around 60. I have played a game where I had one stack with 2000+ hp, meaning you would need about 20 uses of arcane doom to take them out in the first round. Since a VD is basically worthless after casting arcane doom, this unit is only overpowered at the very beginning of a game. While I might agree that Arcane Doom might be better as a 3x3 aoe spell, the damage is not nearly as insane as rain of stones can be when cast by a lvl 15 shrill (which I have seen).