I do like the concept of squads and the current system of 4-8-12 seems a good layout. However how the game handles the squads right now, leaves some things to be desired.

The armor of squads is way off. The game adds together the armor of all the units in the squad and uses it as the squad's armor. It is as if all the unit's are minched into a ball of meat and then plated with 4/8/12 times as thick armor as they used to have. Voila, warriorball! Joke aside, when you put people in squads, they do not get better armor. Each individual's armor would be as penetratable as before. However, depending on the squad's experience and maybe civilization's level of army organization, each individual would get a bonus to their defense. This would not however be proportional to the other individual's armor however, quite the contrary one might argue. A team of light warriors with leather armor would be much more effective in working as a squad, than a bunch of immobile, heavy plated ones. I do know that this is a fantasy game, but some slight contact with real physics is still in order.

Then there is of cource also the issue on hitpoints and their regeneration. I'll throw the ball to someone else for now, as I have to go.