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If you're playing as an empire, sooner or later you will have to deal with the military side of things. To understand how things work there's a few concepts to take into account first. In Unending Galaxy, factions (you included) need time and ship parts to produce their military ships. Additionally, the maximum amount of military ships you can support is capped by your available manpower. We'll explain these concept here.
Manpower act as a cap to the amount of military ships your faction can manage. Each ship need a different amount of manpower, but in general, the bigger the ship, the biggest the manpower needed. You can see how much manpower is needed for a ship at your Shipyard. Values are likely to change during development.
Your total manpower is determined by the amount of planets you control. Different planets with different colony types offer different bonuses. The capital planet of each solar system offer a larger bonus independently of its type. As such, your planets are extremely important and must be defended in priority.
Not all ships count toward your manpower. First, civilian ships that include bounty hunter, traders, miners and even local police forces do not need manpower. Same goes for Constructors and any cargo ship you may build or buy no matter what you're using it for. Carriers are a special case, the carrier itself count toward manpower, but not the fighters it is carrying.
To produce military ships you also need Ship Parts. Those parts are produced in two ways. First, some planet colony types like military bases and industrial colonies produce a limited amount of parts every minute automatically for your empire. Secondly, there's more efficient but costly ship part production factories that can be built in solar systems, they also need to be supplied with resources. Ship parts produced by those factories will then be transported by the civilian cargo fleet to your nearest shipyard or trading station and then will be automatically added to your empire.
To produce ships, use one of your Shipyards. Ships aren't built instantly either, build time depends on the class of the ship, while the amount of ship parts depends on the ship itself.
The Defense Grid is your active and automated military force. Ships built by your manager are automatically added to the grid. You can remove or add a ship to the grid by selecting it and opening the Ship Setup menu.
When at peace with no enemy near your borders those ships will patrol your most valuable sectors. When at war they will protect your borders. Damaged capital ships and carriers which lost too many fighters will resupply automatically at the nearest shipyard. Also, if you have automated your invasion fleets in the Empire Manager, these fleets will be using ships belonging to your Defense Grid to attack enemy sectors.
When a war is declared it will last for at least 20 minutes (see Diplomacy for more details). If you have common borders with your enemy you will be allowed to invade each other. To select a sector to invade, open your Empire Manager and use the war menu in the first tab. Sectors that are being targeted or invaded have a red border in the Galactic Map.
To successfully invade a sector, you must meet the following criteria:
You can however only invade one sector per enemy faction at a time (at least, currently), same goes for the factions controlled by the AI.
When at war (except against AI Core) the war weariness of each faction will slowly increase, any military asset or sector lost will increase this value by even more. When this value is above a given threshold that varies from a faction to another, it is way more likely for the faction to make peace. At peace, this value slowly decreases automatically. It is not possible for an AI faction that have a too much high war weariness to declare war on another.
War weariness main practical impact is to increase ship building times.