They're getting armies against me about the same size, and while they will have some higher tier recruits it's like this;
There are perks that make you able to recruit better troops, or nearly fully upgraded troops straight from villages.
All the perks, they work. They have them too, and they use them if they have them, and get things like that if they have them too.
Troops are actually pretty cheap, so one caravan raid will give them quite a lot to getting back up. Caravans they raid just like villages, but they don't leave a trace.
The AI does follow the rules, that's actually one of the most neat things about this game. Like even down to if there's food shortages, the food actually needs to be produced, caravaned around etc.
Anyway, have a look at those perks. Like you can get fully upgraded troops off by one tier or so straight up from villages.
I.e. A khuzait town, instead of 'nobles sons' will have literal Keshigs and Torguuds to recruit. 1 upgrade off from being a Khans Guard.
You can have entire villages spawn all their troops like that, every village.