[Graeme Dice]

Originally posted by Merry Jolkar:
2) fight first the large army, then the lich lord

It's this one, since storming a castle happens after other movement.

Also, once I kill the lich lord in his home province, does his army disappear ala the orc hordes who vaporized after Sauron was killed, or do they remain, but leaderless?

This depends completely on whether or not he controls other provinces, and whether he has any dominion left in the world. If he does, then as long as his capital has positive dominion he will continue to be reborn there. I'm not sure if he will die instantly when it is controlled by another nation, but the pretender's death has no effect on his troops.