New characters are always joining the force. The game likes to give you variety. Like wizards? You'll recruit several. Like centaurs? You'll recruit a lot. But yet, it's important to keep balance. Having too many of one type of character could offer advantages in certain types of battles, but cripple you in other battles.
I recommend always having at least two wizards, one healer, one archer, one flying character, and the rest as fighters. Keep the weak members of your party towards the back and the stronger members towards the front. However, don't keep weak members too far behind, or else the stronger ones will hog up all the experience.
Remember to always build up your leader, Max. You can't let him become too weak. If he does you lose the battle!
When a character gains 100 experience points, they gain a level. You'll see random parts of their stats grow stronger (HP, MP, strength, defense, etc.). Stats grow pretty slowly. Sometimes you get lucky and see a spike. When you reach the end of the game, sometimes characters gain nothing after a level gain.
A critical part of playing Shining Force is doing plenty of what I call training battles. The point of a training battle is not to complete the battle, but to almost complete it, cast Egress, then start over. Do this enough times to make your army grow to a strength you're happy with. But not too much, or else you risk making the game too easy!
When a new character joins you, they always start at a lower level. Training battles are important to level them up. You'll want to use stronger characters to weaken enemies, then have the new/weaker character go in for the kill to gain the most experience points. Bleu and Zink in particular are characters given to you at a super low-level. You'll need a great deal of patience if you want to level them up (it's worth it if you do!).
Mages/Wizards are awesome when it comes to level-gaining. Their ability to attack multiple targets at once also multiplies the experience they gain! Healers gain even more experience when they use the Aura spell.
There's a small detail you should know about gaining experience points. The game lowers the experience your characters gain when your character reaches a certain high level. They don't want to make it too easy and always give your characters lots of experience. That 49 points of experience (the highest amount you gain from enemy kills) only lasts a few level gains. When gained experience starts lowering, that just means you need to progress further into the game and battle stronger enemies to continuing receiving 49 points of experience for kills.
The game's interface makes a big deal about the terrain your characters stand on. Certain terrain will give characters more defense, at the cost of slightly lowering their movement span. Truthfully, it doesn't make a huge difference in boosting your defense. You don't need to weigh terrain types too much into your battle strategy.
You do, however, need to worry about terrain when you're stuck in a forest or desert battle. These are battles where most or all of the terrain is covered with dense areas. The challenge is that for the entirety of the battle, everyone's mobility is halved! This is where flying characters are most valuable since they can fly over forests. Characters such as Zylo don't have their mobility lowered on forest terrain. Centaurs fare well in forests as well; their mobility is only lowered slightly.
Forest battles are a test of patience. What ends up happening is that your characters are not impacted by the terrain travel way ahead of everyone else. Most of your characters (including your healers!) are clustered together, far behind and struggling to catch up. Don't be so hasty to advance your fighters. Be patient and keep everyone close together. If you get impatient and advance a flying character, they could easily get overwhelmed and defeated.
I recommend for each character to have at least one or two healing items in their 4-slot inventory. It's a good idea to keep one slot empty because you never know when a defeated enemy will drop an item. I mean, you can know if you check the enemy's inventory, but realistically, you're not going to be doing that all the time.
Equip the strength boosting ring and the defense boosting ring to the characters who need them most. I recommend equipping these rings with your flying characters. These rings are also beneficial when you're leveling up a low-level character who just joined.
Some items such as the Heat Axe allow fighters to cast attack magic. Be careful though, because they may break and disappear if you use them too much. The only exception is the Sword of Light, Sword of Darkness, and Chaos Breaker - Max can use them infinitely! Their attack magic gives Max an awesome edge in battle.
The first enemies you should kill off are mages. They won't hesitate to swoop in and cripple you with a multiple-target attack spell. Secondly, you should kill off any beasts who can breathe fire and robots with a laser attack. These attacks cut through defense and always damage 15-20 HP.
Some enemy armies have a leader just like you do. And if that leader is defeated then so does the rest of their army. It's obvious who the leader is since it's the only one of its kind compared to the rest of the enemy soldiers. However, I don't recommend killing off the leader unless you really have to because you could use the experience from all his enemy soldiers.
Mages and Wizards are awesome for fighting strong enemies. Their attack magic can cut through their defenses. You just need to deal with their low defense. It's not too bad; they'll probably get defeated after you land a couple of good blows on enemy clusters.
Centaurs are well-balanced characters in terms of strength and defense. They can equip lances and spears. Lances attack at close range and spears can be thrown up to two spaces. Weapon shops throughout the game sometimes sell lances as the strongest go-to weapon while other times spears are available as the strongest go-to weapon. If lances are the strongest weapon for a time, you may way to keep a spear in a centaur's inventory for instances when an enemy can only be attacked within a two-space radius.
These classes are great for long-range attacks. They both suffer from having average strength and low defense. This makes them great candidates for boosting rings and stat-boosting items. Use these characters carefully.