difficulty setting ? does this game have hard puzzles ? difficulty setting ? thanks

No puzzles.
No difficulty setting. You can set your own rules to make the game harder, though. In LoM by deciding how "high" you will defend against Doomdark's armies, in DR by (with one exception) not using the tunnels (CPU controled lords can't use them, so it feels like cheathing), and only recruit lords from certain alignments and races. At least that's what I used to do (and will do once I'm satisfied the remake of DR is bug free) to increase the challenge.