The watchers moving is an AI bug. The AI ignores 0 map movement.
My position was not all that bad. I didn't have time to check the turn after I staled last time, but the time I staled before that my guys actually won battles

. I built the nation pretty solid, I just don't have time to play it.
I suggested turning it over to the AI because I thought you guys would be more capable of dealing with a normal AI Vanheim and I did not want to place the replacement in a hopeless position.
Goodluck.