http://en.wikipedia.org/wiki/History_of_Croatia

1.why arent the croats a faction in m2tw
According to wikipedia, Croatia was in a personal union (i.e. they have the same rulers) with Hungary from 1102 to 1526, which is most of the game. This might explain why Hungary can get Croat Axemen.

2.Who was their first king
Tomislav I
http://en.wikipedia.org/wiki/Tomislav