YES! This is also in the end rather historical.
Current strategus: One guy marches with a huge army and every other player (could be considered a lord or at least some sort of a captain in general) is left behind to craft and whatever.
Proposal: One guy leads a bunch of people with smaller regiments with possibly even slightly varying equipments if you want to roleplay (ie, here are Velucan archers and here are Ryibeletian cavalry). Regimental commanders command their share of the army and if they are unloyal mercenaries the opposing team might get them to defect etc before the battle.
It's so much better than mindless trading and participating in battles half a world away
EDIT: About smaller factions suffering. Well, yes, they can't field as big army as a big faction in theory, but in practice even right now a big faction has higher recruitment speed and more income to support troops anyway so it lessens the impact of this somewhat.
Also mercenary corps - in more historical way than what currently are called mercs - would become expotentially more sought for. Getting 100 more troops for a battle would be more than 100 man hours spent on recruiting - it'd require hiring someone to command them (in practice probably that someone would bring the soldiers and equipment for just money though) Then mercenary companies who don't want to build their reputation on thrustworthiness can take better offers mid-campaign ;)
You may want to add some feature to tie in different players to one army that disallows attacking those players separately but forces them to move at the speed of the slowest army in the group and stay on top of each other on the map if you implement this though.