Incidentally this leaves it largely under player control, you can deliberately challenge yourself with difficult quests and battles against wild critters, which also leads of course to greater rewards and higher level champions to recruit, or you can mostly ignore that aspect of the game and instead focus on your kingdom's economy, conquest, etc.
That is in my experience absolutely not the case. So far as I have figured out from other threads in this forum (and sadly not the game itself) the monster quality is apparently most directly influenced by the highest level of "adventure research" over all players.
E.g. in my current game with the Karaxis NPC seemingly going for a "adventure win" and having with a few (un-)lucky lost temples already reached NPC level 5 around turn 105 I see level 5 monsters spawning everywhere. And I have barely touched "adventure research" myself, focusing instead on civics and warfare.
In essence this particular game of mine boils thus down to "pushover NPC factions" that wither like ice in the sun and "butt-kicking monsters". Instead of playing against the other NPC I'm battling it out with the barbarians and monsters. Ahh, what fun ... *yerch* In a CIVILIZATION analogy its currently as if I would be facing medieval NPC troops with riflemen of my own while being overrun by barbarians in tanks and airplanes.
I seriously wished monster quality would be determined in some ... no, make that ANY other way. Average adventure tech level? Ok. Turn based? Ok. But this? More nuisance than fun.
Oh, yes. And the "general difficulty setting" in the beginning ... If only someone would have explained it before I started this game. *sigh* By the way: the "tank barbarians" aorund turn 100 are happening at "normal" difficulty.
Rabenhoff