If when the mouse cursor moves over an enemy unit it turns into a sword, then that enemy unit can be attacked by the currently selected unit. An estimate of the damage both sides will suffer if the conflict takes place appears at the bottom left of the screen. If the losses seem acceptable, clicking on the enemy unit will set the combat going. The results are shown in a pop up box. Both types diminish a unit's strength but wounds can be recuperated by resting for a turn whereas kills can only be replaced by recruiting at a friendly village.
Units can either attack then move or move then attack.
The deadly flying snakes kick butt. Erm, well, you know what I mean. A unit suffering an attack may also have its morale effected. Units may become disordered, a temporary condition which lowers a units efficiency for the rest of the attack or broken, a far more serious condition which lasts until the unit can be rested. Any broken units should be removed from the enemy's vicinity as quickly as possible.