I can't give you numbers for exact calculations, but your power rating is based upon the following (in declining order of importance):
- Number of soldiers. Each military unit is comprised of a certain number of soldiers, including naval units. More technologically advanced units contain more soldiers, so the more modern the unit, the more powerful it is. This is by far the most important factor in the rating.
- Certain buildings also contribute to your power rating, though not nearly as much as #1 does: Barracks, drydocks, walls, and castles (though I may be mistaken about the last one).
- Tech level, especially techs that enable newer units.
There may be more, but their impact is probably pretty negligible. Also, promotions do
not figure into your power rating at all--which is a little surprising; I'll take a smaller army of veterans over a bunch of non-promoted new units any day.