You will have a population (chess) limit, so the best way to make your army stronger is to upgrade your heroes. Three lvl1 (one star) units combine into a lvl2 unit (two stars). Three lvl2 units combine into a lvl3 unit (three stars).
Higher level units are, obviously, more powerful and have the huge benefit of occupying only one slot on the board. This means three lvl1 heroes count as 3 units towards your population limit, while 1 lvl2 hero counts as 1.