Your post prompted me to write this in the forum FAQ:

Quote Originally Posted by FAQ
It's a temporal paradox. One turn covers roughly two years. But characters age one year every two turns. I recommend not thinking too hard about it.

OK, you're not satisfied? Well, in defence of CA, characters will last as many turns as in RTW, which arguably is long enough to get used to them but not so long they last forever. Two year turns arguably allow technology to develop before the player has completed his victory conditions - in MTW, most players would never get the chance to play with Gothic knights.

Still not satisfied? I recommend not thinking too hard about it.
You are right, though, apparently it does seem crazy and irritating to most posters.