Okies, you might want to visit the following thread and check out post #166: https://forums.totalwar.org/vb/showthread.php?t=69367

What you are encountering is called the mouse-over bug. Things in 3D space are not matching up - your unit is in one location, but a conflict is causing the computer to think it is somewhere else. If none of the solutions in that thread I posted help you, then you have one of three choices:

A) Give up playing MTW (yes, I have to throw that one in, as unfortunate as it may seem, because some people do go with that option);
B) Auto-resolve all battles;
C) Improvise. The radar map still works properly on the battlefield, so that, together with a modified GroupFormations.txt and inventive use of pausing and cancelling group formation orders to specific units and re-assigning movement options to others, will allow you to play battles. Might be a bit more tedious and difficult, but it most certainly is do-able. And it's the best solution for those who can't find any other solution (and to think, I called the first choice in this list a choice! ).