What is the main difference in difficulty level?
Here are some of the differences (Quoted from
Ginger Ale):
Empire Bonuses: The lower the difficulty level, the more bonus health and happiness your cities start with. Also, benefits from goody huts are dependent on difficulty as well: the lower the difficulty, the better your chances of getting the best possible result.
Finances: On easier difficulties, civic costs, maintenance costs, and monetary inflation are all lower.
Production Speeds (Not relevant to our game unless a Team quits and becomes AI): The AI receives production, research, and growth penalties/bonuses depending on the level. Below Noble, it takes them more food/hammers/beakers to grow a city/build/research something, on Noble you and the AI have the same required amount, and above Noble, the AI gets discounts.
Barbarians: The human player gets bonuses when fighting barbarians, and the exact number is determined by your difficulty level (the lower it is, the higher the bonus). Also, on higher difficulties, barbarians appear earlier in the game and more frequently.
AI Start Bonuses: AIs receive free units, such as settlers and workers, on high difficulty levels, as well as free technologies like Archery. For example, AIs start with a free worker on Monarch and work their way up to a free settler on Deity!
Unit Support: On lower levels, you can build more units before you have to start paying gold to support them.
If you want a more detailed list, check out
Nevermind's Difficulty Level Spreadsheet. Note it was done for Warlords, not BtS, so some of the info may be incorrect, but most of it should be OK for giving you a general idea about how difficulty levels work.