From watching LP's of Age of Wonders II it appears as though undead and Archons are two separate entities within the world.
Edit: According to
Age of Wonders II Heaven:
Archons
These otherworldly beings fight fiercely for life, order, and good. Their soldiers strike with the holy power of the living. Archons fight for just causes, and preach virtue and obedience to their subjects. They seldom seek to overrun any kingdom, but instead seem to appear where they might most likely be overpowered. Still, they persevere and are fearless in the face of death.
They appear as tall, sturdy, humanoids with striking features and a radiant aura that has led many to tremble before them. They are particularly powerful against the Undead.
Historically, the Archons have shared close relations with the Elves, but in recent centuries the Elves and Archons have known their share of strife. The Archons claim that the Elves betrayed their promises and have gone astray. Though the Archons were defeated in their claim and were forced to reconsider their indignation, they clearly despise the dishonesty found among some Elven leaders. Archons guard their powers with holy orders and rituals that prevent deception.
Undead
Hungry, devoid of passion, save the endless hunger to return all matter to dust, the Undead creep in the shadows of every ruined place. They haunt the graves of beings whose lives passed too quickly. They feed upon fear, and breathe nightmares. They speak to men through lustful beings of pure flesh, which drain the lifeblood of the living to sustain their powers. They have no children save the dead.
Death knows many secrets, which is part of its appeal to necromancers. Undead whisper their secrets, empowering their leaders with the ability to learn more, for the stiff price of death's allegiance.
They have no homes, save heaps upon the earth. Their structures are the ruins and great mounds formed literally from the bodies of their conquered. As they gather the tattered flesh and carnage, they swell with power, until the very forces of death walk the earth, withering all in their path.