OK a little more detail!
As far as armies, the spec was something like this: we need 4 enemy armies, that are color-coded in some way. The selection in my first post only includes the player's army, and three of the enemy armies. There is a blue crystal army that lives inside the meteorite. However, you'll only ever be engaging a single army on-screen at a time, so there should not be any confusion on the player's end. As far as confusion from a general design standpoint, that's probably my fault!
So, from a technical standpoint, this whole game was built in Cosmigo Pro Motion. The whole thing took a little under 3 weeks to complete; that includes the title screen/catalog splashes, etc etc. I spent maybe a day or two hashing out the basic gameplay elements and tower designs with the client, starting with this goofy mockup:

As you can see, it used to be MUCH more steampunk/miyazaki. This didn't really suit the game's theme and setting, but when you are just trying to bang out ideas for basic game systems it doesn't make a lot of sense to obsess over presentation details. Then I did a speedpainting of the basic turret, just to help get an idea of mood and surfaces:

And a quick pixel silhouette to test scale and some design ideas (which were later abandoned):

At this point I had sort of tiny epiphany about how to work the game interface. So in a siege-style game, you generally have your base, and then you have some weapons to pick from, and you use them to defend your base. That's about it. But I kind of hate menus, especially on cell phones, where there is no room for it anyways. So we started talking about having the tower BE the menu - i.e. each layer would have a label on it, and you would move up and down, and the exterior of the layer would fade away to reveal the interior, which would have some kind of icon or unit display to show you what your options were. That's when the design began to shift toward the current exterior (which sync'd up with the mood painting a LOT more anyways):

As far as the individual units, the driving philosophy was just readability and color. We knew we wanted yellow, blue, green, and red armies, but we weren't exactly sure where to go from there. I basically just did a lot of thumbnailing in my sketchbook until I'd found some shapes that I thought would work well at very small sizes, and proceeded from there. Nearly every unit began as a single walk animation frame, and from there I created the rest of the walk animation, and the "hit", "attack" and "dead" states. This ended up being a very fast way to work, although the quality did suffer some (though hopefully it is less noticeable in the middle of the game action).