Combat:

No matter whether you intended to be a peaceful Usurper, or if you actually relish the idea... you will have to enter into the fray of bloodlust eventually. You might as well prepare for it. The clash of swords, the twang of the string as the arrow flies. It's WAAGGGGHHHH!!!! Screw 40 bajillion years from now. War is upon us today friends. Let's make it happen.
First and foremost let's cover the statistics and what they mean to you.

Stat NamePurpose
OffenseDetermines your bonus to-hit.
DefenseDetermines your bonus to avoid being hit.
StrengthDetermines your bonus to deal damage.
SpeedDetermines who attacks first in each round.

Equipment and Bonuses Provided
Item NameOffDefDamDam Red
Melee Weapons+10%-+10%-
Ranged Weapons+10%---
Shields-+10%--
Armor (Type 1)---+5%
Armor (Type 2)-+5%-+10%
Armor (Type 3)-+5%-+20%

As with everything else: These are not percentages, but 'percentile points' (added to the d100 roll.)

Bonus NameCompared vsMeaning
OffDef(ense)Off(ense) is an opposed roll to see if you hit.
DefOff(ense)Def(ense) is an opposed roll to avoid being hit.
DamDam(age) Red(uction)Dam(age) is an opposed roll to inflict morale checks.
Dam RedDam(age)Dam(age) Red(uction) is an opposed rol to avoid sustaining a morale check.
MoraleNothingMorale is used to determine if Unit loses PAX, takes Damage, and if they Flee.

The Stages and Phases of Combat: CombatPhases

Combat Speed
Attack Rolls
Defense Rolls
Damage Rolls
Damage Reduction Rolls
Morale Checks
Bottle Out Check
Loyalty Checks

Please also see

Combat Part 2: Combat2
 for more information about Scouting, Combat, and other Effects.

Handling Unit Losses.

From time to time, you will lose a few members of a given unit. Any time a unit is reduced to less than minimum strength; it cannot continue to be sent out on missions. Units can have their losses replaced however; for each unit lost, the Leader can pay an amount equal to 1 GP per individual times the XP level of the unit.

Example:
You have a brand new goblin unit (level 1) that lost two goblins in a caravan raid.
It now has 8 in the unit. The Leader can pay 2 gold (2 goblins x level 1) to replace those two. They are available on the following turn. If a unit has a lot of experience, I may adjudicate that it takes a second turn for replacements to arrive and be trained; as that unit will likely have significant internal cohesion and even already experienced replacements would need to be integrated into the group.

A special note about "Abstract Time."  As long as your Units were returning to your Lair at the end of the turn - they automatically arrive in time for combat.  Yes, I realize this does not necessarily provide a lot of realism: but, it does re-balance the game so that people don't need to leave guards in their lairs all the time.  Short version: You don't need to leave guards, if someone locates your lair and attacks; you will "make it back" in time for the fight.