I'm finding the game to be pretty frustrating when I play as any faction other than Tarth, even on beginner or novice. I've been fumbling through a few different games, none of which I've bothered completing, trying to find the right balance of city development, unit building and what branches of the tech tree I should game my way up. Fallen Enchantress seems to be really geared towards combat, I really feel driven to found cities near or to expand my borders to encompass iron deposits and spend most of my research to unlock metal weapons as quickly as possible so I can make a Civ IV-esque stack of doom.
You have to have a decent garrison in your cities, if any enemy stack of doom attacks your city and you don't have a proportionate defensive force, it gets destroyed in one turn, Civ IV fast. That I don't much care for.
The monsters that roam the world are on par than Civ V Nights barbarians in terms of strength and are numerous on the default setting. They can make expansion incredibly difficult and will destroy tile improvements if you don't have a roving military force to keep them at bay.
You can adjust settings as needed. That said, the world is supposed to be that dangerous. As for garrisons, I wouldn't recommend them because of militias and maintaining a huge garrison of effective troops is too expensive to do everywhere. it's better to have a quick defensive force to respond to threats, and a stack of doom to take down enemy cities. The game is designed in some ways to work well with what the AI does well.
As for faction distinction- it's inferior to Fall From Heaven, but superior to your average Stardock game (Stardock is generally weak in this area, Twilight of the Arnor was the exception). This is an area I expect will receive attention in the expansion, much like how Twilight did with GC2. The factions do play differently.