You have a certain amount of manpower, which you can buy more of during your turn. There seems to be a good balance between what you are using and what you are producing. You need to keep an eye on these things to make sure you have enough raw materials coming in to satisfy the demand. It is very difficult to really understand this balance until you have played the game many many times. You can control the amount of items you trade, and you can see the prices they sell for.
Battle is another story.
Like I said earlier, military doesn t seem to be as important an aspect in this game. However, since war exists in the world, you will need a strong military. These can be set in the game preferences. The first method basically just computes how the battle should turn out based on numbers. This is a huge key to the game.