Welcome to Gaia! ::

They arn't supposed to be, they just turn out that way.
If my PC is a Marine and my NPC is a Marine, they will be in all technicality equal. The issue comes with that many people aren't tedious enough to control all their NPCs like they are PCs. Sometimes I do, but when I've got more than a platoon of soldiers, I start grouping them so that they are easier to manage, so instead of 60 soldiers to have to spread over a town, I'm looking at about six groups of ten or so, to allow myself a battlefield advantage against my enemy even if he's got 120 soldiers all group as one or two.

NPCs arn't invincible, yet they shouldn't be counted as frail and weak. Autohitting NPCs isn't right either in my mind, because too many people would take that too far.
A: "My fireteam of four soldiers walks through a field."
B: "My sniper character sees them and shoots them all through the head."
A: "That's not fair!"
B: "Yes it is, NPCs can be autohit."

Country vs. Country, if they are fashioned after real countries, NPC numbers don't matter as long as they are realistic as per country. Even then if it's Israel vs. China and India at the same time, victory depends on the commander. I've seen forces outnumbered 80 to 1 score a victory with only a few losses on their own. You just have to know what you are doing.

Agreements are nice to have on gaia and such, but I don't like some restrictions at times. You don't just walk up to your enemy and say, "Okay, we each only get to use a few snipers and two battalions of tanks in this war, alright?"

The biggest issue is that some people treat NPCs as gods and don't consider when one should be injured or killed or when they can fire or when they can't. Some people know how to tactically situate a space fleet of 200 ships so they can minimize the damage done to them yet have all 200 ships fire without fear of hitting an ally and so their defenses overlap.

I suppose the agreement system is fine. It could be anywhere from 1 NPC to complete a sniper/spotter team to a no-bars match of unlimited NPCs as long as you have them listed/realism for your country. (USA can really only use 500,000 soldiers, really, and they've gotta leave some home or in foreign bases, et cetera.)

For that last question, NPCs should be able to do the job they are given. Maybe little more than that.
NPCs are basically just Player Characters that you don't feel like getting extremely detailed for. Heck, I've actually used an NPC like a player character, giving him a name, a personality, everything.