Alugra is a powerful nation. I don't know if I would say overpowered, but they are very very powerful. The alugran smiths caused me no end of grief. 20 natural protection on an encumbrance three unit.....I was wracking my brain trying to come up with a way to kill those guys. My red achilleans, supposedly the finest infantry in the world, and balanced by gluttony, low map move and magic vulnerability, had their butts handed to them royally by the smiths, by virtue of the fact they simply couldn't scratch that huge protection stat. Eventually I just rushed researching Harm, and that was moderately effective, but by then it was too late, and I ran out of blood slaves because blood battlefield mages are idiotic with their slave use..... I can't imagine what a normal MA human nation without access to good (nonfire!) battle magic would do against the smiths.
Watchmen are also an extremely nice unit, and Ferro used them very well by mixing them with a GoR watchmen spamming shockwave.
I don't think either the smiths of the watchmen are overpowered, but both in the same nation, without that nation being the nation of WTFBBQ elite troops, might be a little excessive.
Also Alugra has access to a ton of magic paths, and thugs of various types, a unit with a forge bonus, and big communions.
Its a lot of really good stuff to cram into one nation, and Ferro used it all extremely well. Arga dis certainly isn't a weak nation, but in that situation I definitely felt i was playing with a much weaker hand of cards, metaphorically speaking (although a lot of that was my own poor planning

) I've never been defeated so quickly after such a good early start.