Full confession: I was part of a group that wrote a set of miniatures WWII rules years ago that grappled with the 'veterancy' problem. We ended up with a set of 5 levels: Green, Conscript, Experienced, Veteran, Elite. BUT we were trying to show the variations at the tactical level (the 'maneuver units' were mostly company-sized) and had a bunch of other factors like maneuver and combat tables, visibility and 'spotting' rules, and other features that also modified how well units could perform.
So I am very familiar with both the gaming aspects and the historical aspects of veterancy in combat performance.
The problem is, I just do not think we need that much detail in a game that encompasses not the tactical battles taking place in a few hours by a few hundred men, but in a minimum of 1 year by X thousands of men.
In fact, I think we can throttle it down to the most basic aspect of Veterancy in all armies: Amateur versus Professional. That is, is the unit made up of men who are only there as long as the fighting lasts and then expect to go home and do something useful, like getting the crops in, or are they men who profession is battle and preparing for battle. A combination of training (and the resources put into training facilities) and leadership can make Amateurs very proficient - but they still expect to go home as soon as possible. Professionals stay around, and keep learning and getting better, but they also do not usually earn a living and so have to be maintained, fed and paid all the time.
Basically, Amateurs are Cheap but may not be that good, Professionals are Expensive to maintain but are generally better at all of it.
In fact, Professionals are so expensive to maintain with the primitive tax systems of Antiquity and 'Exploration' (pre-modern) states that they were relatively rare - a small portion of most armies, like the King's Bodyguard or Aristocratic Warriors. The bulk of all armies before the game's Modern Age are Amateurs - called up only when needed and frequently expected to maintain themselves until they are sent home. They were also frequently expected to bring their own weapons and equipment, so they were also cheap to Produce - except that, since they were also the working force of the civ, keeping them in arms too long collapsed your economy, unlike the Professionals, who had no other major economic function.
The easy way to show this in-game is that each state, based on its Government and Civics, has a certain number and type of Amateur units it can raise upon declaration of war. They cost no maintenance, but after X turns keeping them as units it will start to degrade your Production, Gold, Culture and Science totals, representing the strain on the economy from keeping too many men from their legitimate Work. Most importantly, because they go home when the war is over (disband) they get no promotions of any kind.
Professionals are the units you build with Production and maintain with Gold (and maybe Influence if we want to get really nasty). They are always there, and can get promotions as high as whatever level as we want to show in-game. But they cost Gold to keep around every single turn, and you the government in Antiquity and pre-Modern Ages simply cannot get your hands on that much Gold from your economy - they are going to become seriously burdensome if you try to have a large, professional standing army.
As a note, the large professional standing armies of Antiquity - late Republican and Imperial Rome and Phillip and Alexander's Macedonians - both existed because Rome maintained 500,000 men with a taxable population of up to 50,000,000 and Phillip extravagantly exploited silver mines to pay his troops and Alexander basicially looted the entire Persian Empire - and before he started definitively winning, almost had to send troops home for lack of ability to pay them: it was a very close-run thing before Issus. Note that Alexander's Successors, even with much better organized states, could not afford as large an army of professionals, and wound up with phalanxes of largely amateur peasants which the Roman professionals chopped to bits.
Civ has never really showed the differences in how armies have been raised and maintained throughout history, and it has the potential to make a much more interesting game than the simple build a unit, keep it forever system we've been stuck with.
