Which is probably why the explanation for their behavior is not included in the tutorial or game manual.  The obvious take-away is "stay away from monsters", but what's not obvious is that you can't and still hope to win on the higher difficulties.  I would suggest that the tutorial make it clearer that disturbing monsters is a gamble you'll find that you have to take.

When you see a swarm of monsters wandering around the AI's territory, that tells you that they are being suppressed by those monsters.  Their expansion will be slower, their troops will be weaker, their champions will have more injuries.

This is a tangential issue, but this really speaks to a weakness of the faction AI.  Once they transition from the exploration stage into the inter-faction warfare stage, they seem to lose all interest in monsters.  And that really hurts them, because the monsters roaming their territories are killing pioneers, destroying caravans, and wrecking improvements.  And their champions are missing out on a lot of easy experience.

You're a moron.

See that? That's called having the balls to insult someone instead of being a snide pussy trying to insult someone without getting told off by moderators.

Having dealt with that, the current behaviour of monsters is so poorly defined and illogical that it has little to no real difference with being perceptually random. Monsters are, at the very least, creatures with instincts and needs. If you're a dumbass who plops down a load of free dinner next to a pack of hungry Skaths who can laugh at the pitiful militia defense, then they're going to go have that dinner. Same with dragons. Same with any hungry beasts. This fits your idiot statements on scripted behaviour, but it should be scripted because it makes intuitive sense. When it comes to hungry beasts happy to eat people, like Skaths and bigass spiders, a city which has nothing capable of stopping them is just dinner that can't run away like everything else does. Settling in such an area without clearing it should be utterly retarded, not a game of 'how lucky am I feeling today'.

Distinct motivations for monster AI can be taken further, with more intelligent creatures like a Bone Ogre that isn't up for eating people but does have a sense and understanding of territory and possession, attacking cities when their borders disturb their home (get off my turf), but having little interest directly attacking a city when just wandering around because it's too much effort (instead attacking units and pillaging any undefended outpost or improvement they find for the shinies). Mites, bandits, and Wildings would fall into the same bracket; all these monsters would be capable of attacking a city, but only with a huge overmatch of power that shows that squashing the city is largely effortless for them, and thus in some way profitable without much personal danger. Guardian creatures like elementals that have no mortality or fear of death can suicide themselves at anything at all that is close enough to their spawning lair. Dragons are just assholes who in every piece of writing are stated to hate humans in particular, but likely any irritating biped will do, and should have their own territory within which you get killed if you enter it or they do splat anything that pushes a border into it.

Monsters being as relatively random as they are now is a sack of balls because it makes no intuitive sense, and no gameplay sense. Absolutely no motile creature is 'random'. It's moving around for a specific damn reason, and we should be able to discern in some way what will or will not piss off certain monsters and what they are likely to do about it, because 'settle next to the unstoppable death machine and expect it to wander around in a schizophrenic fugue' is as bloody stupid as your attack on the idea that monsters should make sense.

Well, the point isn't that the monster will leave you alone (it's most likely going to hang around and be annoying and generally give you fits). 

The "#1 basic strategy" is to realize that there just aren't enough worthwhile places to build a settlement.  You can't afford to ignore that 4/2/2 next to a river and a forest because a monster is there.

To my mind it's a perfect example of a hard choice.

"Random" means "I do not have a clue what it's motivations are" -- this simulates the monsters (sometimes) having priorities other than finding dinner.

Seeing as their actions are based on dice rolls i'm not sure you know what random means.

Futher more it has very little to do with my preferences. It has more to do with the fact that losing a game to random does not = fun to most people and I'm not alone in my aversion to not wanting to spend hours on a game that you can lose because some monster rolled a 10 instead of a 1, and pretending that you can change its actions based on strategy. Dealing with monsters in FE is a game of chance pure and simple. People like to learn from their mistakes.. however with monsters in FE.. it has little to do with mistakes.

Example in his first play through a player plops down a city next to a monster. Monster destroys the city.. so he thinks oh well then I shouldn't place towns there until i kill monster. Next play through he starts building his forces to kill a big baddie blocking some fertile land then over comes some Ai faction plops down a city and the monster wanders over and attacks the players town. So now he has learned that placing a city there will cost him, and not placing a city there will cost him, and thinks the monsters have a preference for attacking the player. Now we both know that what the monster did was based on random dice rolls, but that certainly doesn't make the player feel any less cheated. Nor does it solve it self through more play throughs since either choice could have ended good or bad for the player. Basically you take your chances with monsters and hope you don't roll a bad number.

To take it further.. a third play through he plops a city next to a monster again.. monster wanders off outside his view.. kills some Ai armies and an outpost.. then wanders back into view and destroys the players town. Alls the player saw was the monster wander off then come back and destroy his town. So while sure the monster was attacking the Ai the player has no way to know this.. and only sees that no matter what he does monsters seem to attack him.

How many times do you think the average person is going to try to play through the game before they just move onto something else due to what they think is monsters picking on them and AI cheating? They aren't likely to learn anything about monster behavior through each play through due to the random nature.. so how would you suggest the average person is going to react to negative feedback regardless of actions? At that point the player may keep playing.. or post a thread complaining about it. But he's just as likely to shelf the game and move on to something else.

If they want to leave the initial player experience to be determined by dice rolls they are more than welcome to. They can leave it as is .. but you will continue to see these threads pop up over and over. Because like it or not you can't ignore player psychology when designing games, something which FE tries to do. Informing people one at a time that the AI has no preferences because its actions are based on random dice rolls isn't likely to be very successful in making the average player want to keep playing the game.

Although I suppose to be fair if they have gotten that far they must have already bought the game so who cares right?

Yes, that's the ticket.  I don't know what random means. 

There's a lot of random in this game.  The initial player experience (assuming they play a random map) is entirely determined by dice rolls.  It's a random map.  Although I think it's not completely random which suggests, again, that maybe I just don't know what random means.

I think the game could do a lot more to tell the player about things that are happening in the FOW.  Monster behavior could be more interesting.  The tutorial and manual could do more to inform players about how to deal with monsters.  But they are monsters.

And monsters should be dangerous.  Not like "don't visit the tiles next to them until you have a level 10 champion and a couple strong units" but "ahh!  crap!  stupid f-ing monster!  dammit dammit dammit!" dangerous.  Which is pretty close to what they are now.

Ahhh, you make the mistake of assuming that video games were always like they are now.  You are incorrect.  What you term "player psychology" I think would be better described as "expectations born of years of playing scripted video games".  The Nintendo-ization of games.  It didn't always used to be like this.  And many gamers harken for a game that isn't completely deterministic.  That says, sometimes if you move your settler next to the monster, it wont attack... do you feel lucky?

If you get wrecked by a random monster stack and you say, "This game sucks," feel free to take your ball and go home.  There are a lot of games in the sea and FE may not be the game for you.

I get wrecked by a random monster stack and I say, "Ahh!  Crap!  Stupid f-ing monster!  Dammit dammit dammit!"  Then I hit CTRL+N and start again.  Because this time, I'll get my sov to level 20 and dominate the world, chortling with glee as I crush Mire Skaths and Crag Spawn beneath my boots.

I've got 2hrs worth of video showing that the AI is either extremely lucky, or the AI gets a pass by monsters in a lot of cases.

A shaman army (strong with many units) would leave it's location to chase my units as they passed by.  On the other hand, an AI dropped an outpost right beside it and the shaman army never attacked it.  The army eventually wandered into my outpost - 8ish tiles away.

I have clearly seen that dropping an outpost beside any monster is going to have that outpost removed within a few turns.  But not when the AI does it.

I think there's a game mechanic where experiencing losses makes the higher level monsters start losing interest in you. I just played a game where in the initial moves my sovereign and my champion both where defeated a number of times before I managed to break out of my starting cul-de-sac. And I have noticed that while the low level monsters still chase me like normal, I have been able to walk past higher level monsters without getting attacked.

I'm suspecting the same thing... I recently played a game vvhere it looked like an AI faction didn't go after any monsters vvhatsoever... He had outposts and practically undefended cities everyvvhere I've been so far. I knovv he took some losses from monsters, he lost close to half his faction povver, but there vvere monsters everyvvhere in his lands. I seen a stack of 6 units of monsters, 5 units of spiders and a Hecatomb unit... all on the same tile, and not a lair. Yet he had unmolested outposts and resources and pioneers in the midst of all this. He must have taken some earlier losses to account for the loss of faction povver, but after that the monsters seemed to leave him alone...

Update for the guy belovv: Hard AI faction difficulty, Expert Game difficulty. I conquered city after city of his using my sov and his buddies, leaving them undefended (just as the AI did). After conquering seven cities, five vvere destroyed by vvandering monsters (by the time I conquered the seventh city).

I think the mechanic is vvrong here... The AI shouldn't get "monster immunity" for his cities after losses to monsters, it should prioritize military production and research and hunting dovvn monsters.

Just played a game where the AI settled right near an ashwake dragon.  The dragon ignored the AI city and attacked my city which wasn't anywhere near the dragon's lair.

I think the AI has problems reasoning about geometry - that kind of processing gets to be computationally expensive, and I think Stardock is worried about making end-of-turn take too long. (But maybe they could use time while waiting for the player to move to search for best visible options or something like that?)

If anything, maybe there's something wrong in the way it nerfs the monster AI that's causing the game to become harder at easier levels.

What level were you playing on?