how am I supposed to know some different kinds of monsters don't get along together in the same "team" and they give you a penalty or something if they are in the same party?
I think I finished the first "level" in the campaign, but I kinda lost interest in the second "level" where one enemy attacks one of my castles and I just don't have enough manpower to defend it. Screw it.
You are supposed to read the manual before playing the game, which explains points like monsters from different towns being on the same team causing your troops' morale to go down.
As for "defending," in games like HOMM 3, defending doesn't work very well and a defense-based strategy is a surefire way to lose the game.
To be successful, you are forced, by way of how the game is designed, to rush, and to take towns and resources and artifacts very quickly.
Otherwise, if you don't do that, then the AI will quickly overwhelm all of your armies with ludicrously insane numbers of troops, which is literally impossible to defend against successfully if your own army has significantly less and/or worse units than theirs, and/or if your hero is significantly less leveled-up than theirs (which is another problem that trying to be defensive would also cause).