Independence war 2 crash whenever I try to start a new game or instant action. After the crash it also reset the resolution and graphic setting to deafult. Any idea on how solve this?

I-War II creates an logfile with every game start, it's called 'Flux.log' in the main games directory (pic below).
copy & paste what's in your log file, so others my be able to give a hint :)

It doesn't seem to run as an administrator when booted through gog galaxy.
Try launching from the shortcut in the game folder.

I'm getting same problem - ive tried above solution, ive tried removing the mod 'crosshairs' that gog supply, as the flux log seems to get stuck there, I've tried several things, but no luck. I cant pos tthe whole of my flux log due to limits, but heres the ending of it...

DX7GRAPH: [unknown] Bit depth is unsupported - skipping
DX7GRAPH: [unknown] DirectDraw driver "NVIDIA GeForce GTX 1060 3GB" is OK - adding to driver list
DX7GRAPH: [unknown] ******** Device bound OK
FLUX: [unknown] Attempting to start/restart graphics device...
DX7GRAPH: [unknown] ******** fcGraphicsDeviceD3D initialising...
DX7GRAPH: [unknown] Found 16 bit depth buffer format
DX7GRAPH: [unknown] Checking pixel format against desired depth...
DX7GRAPH: [unknown] Pixel format does not match depth - skipping
DX7GRAPH: [unknown] Found 32 bit depth buffer format
DX7GRAPH: [unknown] Checking pixel format against desired depth...
DX7GRAPH: [unknown] Format is suitable - ending search
DX7GRAPH: [unknown] Found depth buffer size: 32
DX7GRAPH: [unknown] Reading D3D device identifier and description...
DX7GRAPH: [unknown] Using driver "NVIDIA GeForce GTX 1060 3GB"
DX7GRAPH: [unknown] (Vendor ID: 4318 Device ID: 7170)
DX7GRAPH: [unknown] Driver is WHQL certified (level 1)
DX7GRAPH: [unknown] Enabling workarounds for bad hardware/drivers...
DX7GRAPH: [unknown] Enumerating texture formats...
DX7GRAPH: [unknown] Choosing formats for lookup tables...
DX7GRAPH: [unknown] Building render state translation tables...
DX7GRAPH: [unknown] D3D Driver does not support Flux correctly and may exhibit a loss of visual quality
DX7GRAPH: [unknown] Setting gamma to 1
DX7GRAPH: [unknown] ******** Device initialised OK
DX7SOUND: [unknown] ******** fcSoundDeviceDA initialising...
DX7SOUND: [unknown] ******** Device initialised OK
FLUX: [unknown] No class specified for CD Audio device
FLUX: [unknown] All devices started successfully
FLUX: [unknown] Game initialisation complete
IMOD: [unknown] Scanning for mods in "./mods"...
IMOD: [unknown] Found mod file "crosshair"
IMOD: [unknown] Mod display_name = "Cross-hair"
IMOD: [unknown] No scenario package available
IMOD: [unknown] Scanning for mods in "./mods"...
IMOD: [unknown] Found mod file "crosshair"
IMOD: [unknown] Mod display_name = "Cross-hair"
IMOD: [unknown] No scenario package available

Found it!!

After trying nearly everything else, I came across an entry in the technical faq on the excellent i-war2.com site -

turns out i needed to delete the following folder :

<install folder> \resource\images\planets

these were features for a future graphics upgrade that accidently got into the latest patch...

Now it loads up no problem :)