In civ3, you get a leader when an Elite unit wins a battle. However, it is random[I think] so you won't always get one. It is usually a rare occurance. The leader cannot attack or defend,[He has a sword in the Middle Ages though, but doesn't use it
] and has one movement point. The leader can be used to hurry an improvement or wonders, so that the improvement or wonder is finished in one turn. Using the leader is the only way of hurrying a wonder. Or you can use the leader to build an army. An army is like a super unit: you load units into it, like a ship[3 is the max, unless you build the Pentagon, which increases it to 4 units max] and all those units fight as one unit. When each unit in the army gets knocked down to one health in battle, the next unit steps up to fight. The units in the army move together, heal together, and cannot be removed from the army once they are loaded into the army. Whichever option you choose, the leader is lost in the process. You can increse your chances of getting a leader by building the Heroic Epic small wonder[this requires a victorius army to be built.] You should probably use your first leader to build an army, since the Heroic Epic, Pentagon, and Military Acadamy require an army to be built. Armies are also quite powerful, depending on the units in them.
The Military Acadamy allows you to build armies without a leader, but they are expensive. It is a good idea to save some leaders for important wonders, like The U.N., Forbidden Palace, Apollo Project, or any other wonders you really need. And remember, your leaders cannot defend themselves, so they should be escorted by a defensive unit AT ALL TIMES. Hope this helped.