The core system of Elemental multiplies modifiers, with the easily ancicipated consequence that every additional level (improvement/whatever) of increase makes the immediately previous increasingly underpowered.
It also produces results by turning modified values into ranges for random numbers, comparing said random numbers, and using the difference as the result. Which means results become increasingly unpredictable and unbalanced over time.
Beyond creating the dual-spirals of game breakage just mentioned, the system is also too simplistic. It’s not a system you can easily make exceptions to, so the potential for cool/weird/interesting spells, special abilities & whatnot, is limited almost to the point of non-existence. Which makes the playing pieces boring to use.
As I’ve said a great many times by now, the only real hope for elemental is that Stardock scraps the systems design entirely, in favour of something more elaborate & predictable, or at least enable modders to do so. Well, that, or that they turn it into an almost exact copy of GalCiv - but I don’t really think that is something to hope for (not that GalCiv was bad. On the contrary, I’m still playing it).
We need a system where a hellspawn can be healed by fire and killed with cold iron. Where blind people can’t hit for shit, but can cause just as grievous wounds as the seeing. Where having a bow doesn’t mean you can’t fight melee. Where wearing field plate won’t protect you from a catapult… Basically, we need a systems design along similar lines as just about every other wargame, rpg & 4X-that-isn’t-GalCiv. Otherwise the game is screwed.
Depending on how close the AI is to you, in that time frame you should either dig in and fortify until you can crush the AI, or you should expand to at least 4 towns.
The former is necessary if the AI is so close you can’t expand. 4X games aren’t exactly wargames, but since you need a competitive chunk of the finite resource pool to win the game, you (and the AI) may not have the luxury of choosing if you want to go to war.
The latter should enable you to re-/train units fast enough to beat down the AI if it comes after you. Assuming you haven’t spend all your gold & material on recruiting useless heroes and expensive production buildings whose product you almost certainly can’t use that early in the game.
By default, all the players in a match have cold war’ish relations. Military- & reputation- equivalence and trade will make factions similar to your own more inclined to peaceful relations with you, but the nature of your situation in the game is such that you basically can’t have peace without superior firepower. It doesn’t mean you have to build your military continuously, but it does mean you have to ensure you don’t fall behind. You can keep track of how you all compare through the kingdom & foreign relations overview menus (yet another flaw of the GUI design).