That was Mr. Dark Wizard and he cast Despair.  It hits all enemies and I think it does 3 damage per level, and they are often level 20.  He's a dick and beating him can be really, really difficult.  He cast despair every few turns, so he will kill you eventually.  He also cast a fear cloak spell that makes him very difficult to hit.  Few things scare me in the game, and Dark Wizards are one.  

To beat him, you need fast and strong attackers.  The best are ones trained in a fort that gives the impulsive trait.

I've played a ridiculous amount of games on large maps (pre and post beta) and have never had a minor faction npc with a spell that caused damage anywhere the extent you portray. I know that a sovereign with the correct skills and enough fire shards can do quite a bit of havoc in short order.. 

What difficulty do you play on?

Do you have any custom mods? 

Do you have your game saved? - If so, please upload a screen-shot of the this 'wizards' stat page with the suspected possible spell used highlighted by your cursor and possibly someone can help pinpoint the issue with your sandbox. 

Edit : Seems you've already identified the npc. Unfortunately.. I've never ran into him yet.  

Mounts also can help you close the gap on the tactical map a lot easier before he can spit out some spells. 

yea, I was able to kill him with my sov around level 10/ level 12 ... just managed to kill him before he casted it

( granted, it may have taken a reload or two )

With Mage Sov with right skills and very high initiative can easily kill that Dark Wizard, but you will have very hard time if your sov is warrior-type hero and no counter-spell available or with not enough magic mastery (he has fairly high magic resistance)

That said, you can say he is actually stronger than a dragon. It's nightmare when you find him too late and you know your city's influence will hit his keep too soon, making him destroying your city before you have chance to level up your heroes.

Easy way to kill them -

Quick Resolve. 

Yeah he is scary good. Don't settle near him until you have a task force to take him out

Only works if that mage has more initiative than dark wizard.

And what a wonderful thing that this was fixed and no longer an option

On the dark wizard front, I always found that attacking with a few 5-unit high-initiative archers (with maxed initiative buffs) can also help, as can luring him into areas protected by a few of your high-level outposts stacking modifiers ...

This is cool stuff, if you ragequit you are missing the fun. You might have overcome him, he might have gone towards an AI empire or something completely different might happen. Make a story in your head. If you want the monsters to sleep until you are ready for them, I suggest Heroes of Might and Magic VI.

And remember: You provoked him by getting him into your ZOC. This is something YOU control.

Dont give up on this game, its great

Bah he isn't so hard..

The despair spell can be countered  

Counterspell is the key IMO.  He'll have like a 20%+ chance to resist it though, so as someone above suggested bring two mages who can both cast Counterspell or its equivalent (Spell Leech etc).

Still works on [1.004], at least in some situations. Was playing as Lord Markin and got that special event where a girl comes to say that something happened to her guardian Bill. To complete the quest, you have to face a dark wizard. He obliterated my army, Lord Markin had less than 1/3 of his hit point and yet... when I pressed auto-resolve, I won the fight!