It uses tactics.

I've seen flanking manouvres a few times (although they are a bit clumsy), and I know from bitter experience that the AI likes to force you to engage his infantry in forest when playing Carthage vs. Gaul fights. The AI is particularly good at handling horse archers/archer chariots because it can micromanage many units simultaneously.

The AI is no Napoleon mind you, so I'm not too surprised that people have garnered the impression that it just flings troops at you.