If you want to save Swadia, you need knights, and lots of them. Focus on getting an army. 20-45 knights should do it depending on your difficulty settings. With that many of all cav, you can easily catch enemy parties and run from parties that are too big. Also, get a couple of companions to level up. Give them lots of training skill. This will not help you for a while, but later you will be able to raise tier 3 armies or so very quickly. Then go forth and steamroll with your unstoppable cav army. Defend any towns that come under attack, and get yourself a castle to store men in. Basically, survive. Once some have made peace, build up a siege army. Then, once you go to war again, you can start quickly grabbing castles. If you start to get overwhelmed again, store your siege army, grab those knights, and start the pwnage again. Or you could abandon Swadia and go capture a random castle like I did this game... but to each his own.