The map is a representation of the dragonlance world. It's grid based. The highlord armies start strong, the good guys start weak. You recruit nations to join your side via diplomacy. I recall something about highlords being able to terrorise nations into joining their side with flights of dragons, although if it doesn't pay off they will almost certainly join the good guys. Various nations provide different types and qualities of troops, e.g the kender are pretty poor infantry, while the minotaurs provide very strong infantry and iirc, the best ships.
There's a mechanic for the good dragons to join the fight if the good guys hold out long enough, which usually means the good guys will win if they aren't crushed rapidly, although it is possible that while they aren't dead, their situation is already hopeless. It's very difficult to mount an assault on the highlord capital if you do manage to put yourself in a winning position before the dragons arrive, as the terrain leading there from the west (where the good guys are likely strongest*) is basically just a couple of mountain passes.
It's been a very long time so most of those details are probably way off, but I loved this game as a kid. I'd be interested in playing it again to see how it holds up. I get the feeling that I would find it pretty lacking these days. Being that its the same map every time, and the same nations with the same initial diplomacy sentiments, it ends up being quite easy to 'beat' after a few plays, simply by knowing where to direct your diplomats at various stages. It could be more fun 2 player, although I don't recall an option for that. It may simply have been that most of my friends were playing turbo outrun and the like though.