What determines battle order?

[Master Shake]

If you REALLY believe that, try chasing any army that happens to be rampaging through your territory: You will never catch it unless you guess where it is going in advance: If it were ACTUALLY random, you'd catch it about half the time, since sometimes you would move first, sometimes he would move first, as both territories are "hostile" moves.
However, this never works. The behavior is clearly deterministic in favor of the raiding party. Obviously, this is done to promote this behavior. Whether this is good or bad is irrelevant: It simply is, and to believe that it's purely a "random" thing is being naive. Size of army, speed of army, all appear to be irrelevant: A groundpounder raiding force consistently can outrun even flying pursuers, both large, and tiny: You NEVER catch them.

My understanding is that this is incorrect.

I could be wrong, but I believe faster armies move first. If armies are the same speed, then the smaller army moves first. I can understand how rules like this might make it seem like you can never catch raiders, but that's because raiders are likely faster and/or smaller than the force you are trying to cath them with. Try to catch a raiding army with a move 3 SC and see if you catch them.