I'm not sure that I have any particular tactical advice -- I'm also not sure that I've ever had to fight a battle like that in MTW. But I wonder if, even if it's a "defensive" battle, you ought to treat it like an offensive engagement? If you sit tight, they'll swarm you -- so be tactically aggressive, and defeat the enemies in detail, before they can unite.

I suppose that if they start right next to each other, I'd still want to seize the initiative. If you sit on the the hill, they'll turn your flanks and swarm you. I think aggressive maneuvering might be your only advantage; your army is smaller, and thus hopefully more flexible and mobile than your 32-unit opposition. So, anyway, you say you can win it if it's an offensive battle -- so there's your answer.

Although, if you're sitting with another of your armies in "reinforcements," then I think that you're just being defeated by a limitation in the game engine. *That* would infuriate me.