That's about what guard does.  I don't think that guard gives any defensive bonus (I could be wrong).  The idea is to leave an army somewhere, like on a resource, and not worry about it.

Guard is a wonderful ability. It activates when you are trying to turn the grid on and forget that command is ctrl+g not g

I was thinking guard would make them patrol around your area of influence.  It would be kinda nice to have them move around your city and defend the outskirts.

Sovereign: You there! My loyal soldiers! I command thee to "guard."

<Sovereign stalks off to micromanage his other several hundred loyal followers.>

Newly Promoted Lieutenant: Hold on, what do you suppose he meant by that - just stand around here?

<Lt. begins thumbing through the manual muttering to himself, "Galley, Gantry, Garrison..">

Raw Recruit: We could fortify this spot! Look, I brought my shovel, give it a few days and we could have some lovely earthworks-

Sergeant, Veteran of the Last Three Wars: Yeah, knock yourself out, kid. Sov said guard, he didn't say what, I intend to sit right here and guard my lunch.

Lieutenant: If it makes you feel any better, son, we could keep an eye out and attack any ruffians that happen along-

Raw Recruit: Yes, sir! And we could patrol around a bit, y'see, to make sure we find them first, and then..

<Sergeant studiously ignores him, laying a strip of salted pork onto a biscuit with the air of Michelangelo applying the final brushstroke to the Sistine Chapel.>

Lieutenant: <sighs> It's not in the manual.