As I understand the elite units form them, I dint get there yet in my game to have elite units... but chel said that elite units would organize the lower tier units.
yes, elite units gather non-elite units periodically around them so they can then continue fighting closer to each other and help each other in overpowering enemies. There are no permanent squads formed (maybe I will implement that later, but I'm not sure if would help the flow of battles). When elite units do this they also recover 10% health of wounded non-elite troops around them (in a radius of 40 meters). These effects stack, which means if you have several elite units fighting with your army they will heal wounded troops quite effectively. Same applies to AI armies, so try to take out elite units first when you can.
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