Neither. I build units I can use in battle, and shuffle them out when I need them. I keep some basic infantry or cav, and javs around in towns and scraps that I might want to use as an emergency force. Peasants are a waste of upkeep and can't be positioned to do anything useful. Town militia rout almost instantly on VH, so they are used only as a placeholder early in the campaign until I can disband them and replace with a real unit.