I've seen a number of comments like this, which assume we're talking about modern generals. That's true for the past few hundred years. The problem is that Civ runs all the way back to 4000BC, and for much of that history leaders did in fact lead from the front. Warlords often got their leadership position because they were the best at fighting. As in so many other areas, Civ doesn't quite achieve the balance between Ancient and Modern eras.
My personal feeling is that you shouldn't be allowed to settle generals until later in the game, like Military Academies (though even those, I believe, still need to be fixed). That way, all of your early generals have to become warlords.
I don't know much about western ancient history. But in china sun ze in his book art of war suggested that a good general is a general that can keep himself out of harms way. After all you can only lead your army and give out orders to different units from behind the scrammage line, if you throw yourself into the foray, you are not leading the army anymore. Sun ze wrote art of war somewhere in the 1500 bc time, not sure exact date, that would be roughly the first GG spawn time in civ4. obviously in ancient times, a general has to be at a close proximity to or on the battle field to lead the army. But sun ze is against the idea of generals engaging and in turn endanger their lives even if just a little bit by engage in hand to hand combat voluntarily.
I understand your position that in ancient times, some warlords, alot others got it from other means like blood lineage, got their leadership position because they were best at fighting. But they proved that before they become leaders, when they are still subordinates to the general. probably before the professional armies like roman legions appeared, generals do often engage in hand to hand combat. But in civ4 you won't get a GG with warriors, you probably get your first GG with praetorians, thats when romans had professional soldiers. I don't know much about roman armies, but i want ask, when caesar was the commander of his legions, do he personally engage in hand to hand combat often? or he only do that because he don't have much other alternative? Please do not respond by telling me in the movie gladiator russel crow engaged in hand to hand combat as a basis, hollywood don't respect history to details. If the answer is that caesar choose to engage the enemy hand to hand himself often, then I can only be amazed by his incredible luck on the battlefield. In china, those generals that were famous for leading armies into battles, are not the real commanders of the army, they only have the title of general, but in reality they are just a subordinate to the commander in chief. For example one of the GG in civ4 is caocao, He lead numerous military campaigns during romance of three kingdom period. But he never once engaged in hand to hand combat by choice, in fact, he actually fled the battle field many times to avoid danger, in one of the battles he had to cut off his beard and give his cloth to a general under his command to escape. its the generals under his control that did all the dirty job. But caocao is still considered to be a great general, and i personally considers him to be the greatest leader during his time because of his leadership ability, eventhough he fled from battlefield so many times.
My point is firaxis gave the GG's names of the famous army commanders like caocao who don't engage in hand to hand whatsoever, yet they implemented warlords as either a super medic or a buffed up rambo. Those warlords do not live up to their names at all. Warlords should be able to make the whole army that is in proximity of him fight better, at least that way they can live up to their names.