To start, I believe that factions in E:WoM are, unfortunately, nearly identical from a game play perspective. The idea I am posting here is one way that I think the differences between Kingdoms and Empires could be made more clear.

To start off, Kingdoms and Empires were originally described as having radically different views on development of armies. In one of the old developer posts, it was suggested that Kingdoms valued teamwork in their armies, whereas Empires placed more emphasis on the individual. One way that I think that the game could show this is in the way in which units gain experience.  Currently, for both Kingdoms and Empires, all units taking part in a battle gain the same amount of experience. My suggestion is to have the allegiance of the faction determine the method of experience gain (you could, if you wanted to, add in some faction attributes that emphasize different parts - for instance if a faction is supposed to be filled with powerful spellcasters add an attribute that gives spellcasters bonus experience).

Empires are described as being a 'survival of the fittest' society, so perhaps their units should gain experience based on actions performed in battle - something along the lines of:

    exp_gain = x*physical_damage_dealt + y*spell_casting_credit - z*damage_sustained

    spell_casting_credit = #_level1_spells_cast*level1_multiplier + #_level2_spells_cast*level2_multiplier + ... + #_level5_spells_cast*level5_multiplier

with x, y, and z being reasonable multipliers for a normal game of E:WoM or FE (possibly affected by difficulty level).  exp_gain is per unit.

With Kingdoms, perhaps a total experience gain pool for all units in the battle, with the experience being split evenly across the units, or keep the current system for Kingdoms.