I will have to disagree. Large units lose more when they panic and run. If you are commanding a unit as large as 200, you can lose 40 men from just panicking. Might even lose 40 more when you rally them.
Smaller units don't suffer the same way. Also, they are more likely to retreat than scatter meaning you may end up wasting hits on a small unit that you do not want to attack. Having more unit also means for melee units, your hits get spread out and you fail to finish your target. As for ranged units, it is even worse since you have a chance of attacking a single digit unit when you could be hitting a larger unit since you can only attack one unit per round.
Single unit may last longer but more unit wins you battles. Winning more battles and being able to sustain your advantage will win you the war not large units.
Except we don't have the gold to continuously replace our units. We're actually at half strength right now because of a lack of gold. In addition, you're mentioning personal anecdotes, not statistics. I, for example, could quote my own personal anecdote of just completely out attritioning enemy units with one massive unit. I personally have almost never seen the kind of panicking that would lead to that many casualties unless the unit was absurdly large (up in the 200s), and by that point you can just take the casualties because of its sheer size. Smaller units are basically a glass cannon. They work well once. And only once, because your men have died and you need to refit. Which costs gold. Which we don't have.
You should look up the gold comparison I did of the involved nations near the start of the war, Greater Xavax isn't actually that rich of a realm compared to what we were facing, and with the amount of looting that has been going on in our regions, it's even less so now.
