The self-control is the new game factor and it's responsible for the feature, when a squad in some situations makes its own decisions not controlled by a player. E.G. European knights with high self-control can decide to attack without an order given by a player, they go hog-wild, so to say. At such moments the unit's icon blinks green and that means, that the units are very encouraged and ready to fight hard. But there is another feature of the self-control. E.G. A squad realises, that it got in a dangerous situation and it needs to get out of this. The squads's icon begins to blink red and the squad does its best to leave the dangerous place, simultaneously fighting if it's needed.
So the self-control is responsible for the squad's moral stamina in critical moments. These critical moments can be positive, e.g. your army destroys an enemy and the part of the army, that isn't used in the battle, can "blink green" and plunge into the thick of the battle. And there can be negative critical moments. E.G. You have ordered your gunners up and haven't protected their flanks. So the gunners went to far from the main part of the army. And when they see the enemy's knight cavalry running to them, they will "blink red" and do their best to get out of there, back to their army. And if the knight cavalry comes too close, it can happen, that they leave the battle field without a shot and a damage, just because of the animal fear before the knight cavalry coming closer and closer. It happens because they aren't protected from its attack. But if the gunners manage to reach the main part of their army, they will calm down, seeing their brothers in arms, turn around and fight.
One can win local battles through psycological pressure of your enemy. Strip away several enemy from the main forces, surround them and you will see, even without shooting at them, their moral decrease (if they consist of units with weak moral, like militiamen, archers, swordsmen). But there are gods of war, who can fight being totaly isolated holding his own (sergeants, knights). But you should remember, that there are no constant situations in the game, a squad of exhausted and wounded knights (you can see the amount of the wounded pointing the cursor at the squad's icon or at the squad itself) would have very low moral and wouldn't fight hard.
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