Routing by moving around can have several causes.

1) Tiredness. Tired men have a lower morale. This is why you should rally troops at the earliest opportunity, before they become more tired from running and lose even more morale.

2) Turning your back on the enemy lowers morale (unless back is protected, in which case there is a bonus). Same goes for flank, but penalty is less if the flank is threatened. I think that is what Makkyo meant, but he wrote honour instead of morale.

3) The infamous Auto rout. The Too many retreats-message point to that. If a unit turns it back to enemies too often, it will rout regardless of morale. I do not know why this implemented. Perhaps to make it more difficult to skirmish the enemy to death.
I would very much like to know how this works exactly (turn back one specific unit or just turning in general, how often you have to turn for auto-rout, etcetera).