You can improve your Commanders and Castellans by equipping them with different equipment and Gems.
There are different types of Equipment and Gems.
You can get equipment and gems by attacking to Robber baron castles and by completing different event missions.
The bonuses of all equipment will directly strengthen the army controlled by the commanders or the castellans.
You can forge unwanted equipment and gems into new items in the smithy. And you can also improve your equipment in The Technicus event that appears eventually out of your main castle.
Here is list of equipment and gems.