I'll try to answer in order:
Candle Cloak does a maximum of 8 fire damage. It only burns units doing melee damage. Ranged attacks are how you counter it. It should be doing 4-8 fire damage. If it is doing 1-8 damage, that is a core game bug. I might be able to fix it though. You have to imagine this as a fiery shield around the unit. Only hitting the shield will burn you. So, if they dodge your attack, you don't get burned.
You can put armor on slaves. Slavers produce cheap armor too. Go ahead and spend all your metal on some chain clad slaves. They don't even cost any wages. But those units have -1Hp per level. So they will always be weaker than if you had used Quendar soldiers. And you don't get that near immunity to fire. That is the choice. In addition, each slave gets -30 labor against and labor you add from weapons and armor. That means they can generally be trained once per turn. Magnar is a great war machine. But they can never grow like other civilizations. They will have lots of small villages pumping out weak units. That means they don't get higher level fortress bonuses and they have terrible city defense. When we do the faction content this idea will be fully fleshed out into a totally unique way to play the game. I think what is there is no more OP than the other factions.
Boss means it is a lair boss. It has special attributes to prevent being charmed. It will have no moves.
Burning Hands should stack. I will correct that, thanks.
We just switched over to the new system. Bear with us as we balance it out. Much of the previous danger came from the idiotic AI releasing hell it didn't have to pay for. That can no longer happen. The thing we have to do now is get a good pacing of how many monsters the players can handle coming out of these lairs. Those lairs will keep producing troops until you kill the boss. The lair will upgrade over time. If you are doing too well, turn the world difficulty up to Chuck Norris or so. That will make the lairs upgrade faster. I do wish we had a specific switch for this, but it is currently bundled into the difficulty setting. Going to Terrifying may also help. The only way to really get this part perfect is for me to play more.
Magnar needs slave units. I have been waiting to release my units until I have the core traits nailed down. Here is a beta version of the units:
Unzip it to your user directory in the Units folder. It has a pretty good supplement to Magnar, Tarth, Yithril, Gilden, Altar. I will get the rest done soon.