You're making me insane. At one point I really want to enjoy this game but then at times it just throws me off so much.

This game has serious potential, the unique blend of HoMM, Age of Wonders and Master of Magic makes it so interesting. Still the lack of any sense of progression or balancing makes it really hard to enjoy.

So I fired up the campaign and the first level took me several hours to beat, even on beginner. I had to grind dungeons until I had enough space to recruit soldiers and throw them at the enemy. At one point I like the idea but it's already so frustrating that the enemy has far superior numbers and strengh, you have to tediously grind until you have enough units that you can simply throw at the enemy. I tried using various tactics and such but I was always eradicated.

Still when I had my army prepared and was about to besiege the enemy stronghold, the game was really great. The combat felt satisfying and challenging. The RPG part is quite rewarding and it's always fun to explore areas and have random encounters. Managing the provinces is great fun despite the lack of accessible information. Getting more experienced with your hero and army is quite rewarding aswell. The astethics and soundtrack is great.

Nevertheless the balancing and difficulty is so off putting. I'm currently playing my second mission on a tiny shard and I'm getting my ass kicked so hard, even on beginner. I started exploring and capturing the surrounding provinces while trying to maintain a good army and building my stronghold so that I can train better units. At one point I had archers and spearmen but then suddently the enemy came and took over some of my villages with swordsmen and whatnot, then there were over 20 turns of recapturing and struggle with no sense of progression. It's really hard to find a right pacing, you don't really know when you should do at which point. It's really irritating.

Then I tried playing some custom matches and I always fail at some point, sometimes right from the bat.

When I look at this game I see the magnificent potential behind it but I feel so frustrated playing it, I'm at a point where I feel like I should just skip this game. Is it worth to continue playing?

So much content and cool ideas, it keeps me playing for some reason.

I suggest to start hotseat game, and skip turns for second player.
You would be able to learn strengths and weaknesses of enemies, good build paths, without being in a race with AI.

For learning game on beginner use warrior and commander.
warrior can singlehandedly kill most guards in the game. build for him basic armor, magic armor and astral enegy. Maybe use brigands/barbarians for couple easy fights.
commander - on beginner pick crossbowmen for him. learn ranged tactic&morale bonus. on level make 10 multiclass
with scout. Beginner level gives heavy penalty to neutrals, so 5-6 high level crossbowmen can kill dragon in one turn.

Well, I always picked the ranger due to his long range archery. Thus far it has been very useful, melee combat seems really lethal and I don't want to get my units killed. Although I'll try to take a warrior next.

The funny thing is whenever I try to play smart I still get screwed over, I try to use the terrain to my advantage including all the bonuses but it never helps that much to me. Perhaps I do just suck at this game.

To be blunt, yes you do… but this game is hard and we all sucked at it to begin with.

1. Play the different heroes… every one of them has something they excel at and at least 1 thing they suck at. To be fair, the amount of times I see posts of Archers suck because they can't handle lots of troops or warriors suck because they can't kill trolls is partly due to the general lack of data supplied about the game.

2. Watch {Play against} a human… the campaign is long and will eventually provide you with shards that encourage new tactics but Humans remain the bleeding edge of the learning curve.

3. Archer are my pick for best, they have fast killing power and can stay away for as long as they have arrows (carry spares) but they don't win shards unless you;
a. Give them a troop that can hold the line i.e. swords/bulls in order of lowest to best.
b. Use their levelling speed to attack the capital before the defenders can respond… not really an option on the large maps.

4. Listen to Gremlion… seriously.

Scout is pretty good, but he have ceiling - 1 turn - one kill.
Mage can learn AOE spells, Warrior have round attack, commander can cast astral energy on someone with round attack.
Try to pick swordsmen and healer for scout: https://www.dropbox.com/s/3k3twkv7p4x18b6/swordies.mp4

Not sure why you think this is confined to Eador. I mean 2 games I have played that you mentioned in opening have this same issue namely Heroes of Might & Magic and Master of Magic.

Come on especially in MoM you cannot take out most lairs/nodes until quite a bit later on. This game set the benchmark for difficulty haha.

Heroes, ofc you cannot take on a stack of Black Dragons first month. This has always been something you have to work upto and learn how the tricks and how to get around their spell immunity if you can.

At least you don't suffer from my problem with Eador which is unwillingness to play evil guys or to start with any but mage 90% of the time.

I agree, this has been a common problem in Master of Magic and Heroes of Might and Magic. You could easily run into a horde of really powerful enemies early on without knowing if you could take them. Numbers can be decieving aswell.

Anyway I need to learn how to estimate an enemy army before battling it. Also I have a hard time fighting AI players, being able to get some provinces is manageable but then also defending them against the AI is really hard.

When you underestimate an army, use "turn back time" without restraint, losing experienced troops can set you back too much. Its no different than reloading when you lose your army in Heroes 3.

Since there is already plenty of advice around, I'll say this: Most of the things that annoyed me in the first 100 hours of Eador were due to my inexperience with the game and are now not a problem anymore. For example now I nearly never have to grind because either I am so fast that the enemy has nothing good yet, or I am good enough to kill everything they can have once I meet them.

I would not call that a problem. I would call it a feature.

Well, it's a problem gameplaywise to my in my quest to get better in this game. I like that but sometimes that fucks me over really hard.

That's how I like it.

Attacking a territory with only a few archers and a magic leader against horde of barbarians. God, so satisfying.

Still I don't get why the game has so many difficulty levels and yet the lowest one is still giving me a hard time, I understand if a game has a certain learning curve or difficulty to it but beginner should simply be easy and allow me to get a grasp of the mechanics.

Beginner is easy.
It doesn't take much time for experienced with strategies player to understand that AI have only a few basic rules. He is always rush to your troops, and having defenceless spearmen and archers is the suboptimal way of playing, as you can see it in your ass, handled to you.

Tough tanks (either high hp or high armour - barbarians, swordsmen), meatshields (summons, undead, demons), heals, buffs(astral energy) and debuffs (web, slow, blind, sleep, even fatigue and fear) is the way to go.

And really how would you truly grasp the mechanics if it was set to super retarded easy that there were never any bad consequences? Already neutral monsters have almost only half their real HP. This makes them much easier to take down with your own fully unhandicapped army.

Truthfully I never really played this game beyond 1 time on beginner as that way never actually helps me learn much in 90% of games. I learn through trial and error or watching others make mistakes sometimes.

One of the major slap in the face wake ups ppl who play on beginner end up having is how almost useless missile troops like slingers are because they cannot deal enough damage to kill before the enemy reaches them in higher difficulties. Also that Barbarians are not able to kill as efficiently as well.