I really can't figure out if you're making fun with me or not, asking to remove the main mechanic of the game. Maybe what you're really looking for is a different game.
Furthermore, diplomacy literally does nothing in the hands of an AI player - they always decline. Furthermore, that's not how diplomacy works in this game. You still need to defeat the enemy before diplomacy procs.
Mills are awful, terrible things and are really rare in this game compared to the Heroes games for the very same reason. Sure, they could act like a mine, but their effect is too noisy to be meaningfully kept track of strategically. I'll see if I can figure out some sort of compromise that works better than either option.
External dwellings being annoying is something I have a plan for, but once again, the rate of your feedback far exceeds my rate of implementing features.
Expert combat - someone else mentioned that. I guess I'll nerf it, though I really love the whole idea of having an incredibly powerful hero. I'll need to ask - just how powerful is it? Equally powerful as your army being 15% stronger? More than 15% or less?