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The general who pays no attention to the morale of his troops is doomed to failure.

Civil War Generals II, Advanced Strategy Guide
I have placed morale in the first section for a very good reason.  It is ultimately, the most crucial element of the game, the least understood and often not paid enough attention to.  HUGE mistake made by beginning players including myself.  I learned of its importance when in my 1st month on WON my ENTIRE Rebel army was routed on day two at Gettysburg due to my ineptitude regarding morale and the brilliance of my opponent, Gen Simo Buford.  I marched my morale weary troops into his prepared defense which was placed in a reverse slope behind Cemetary.  My men marched up from the west and two turns later, nearly every unit was running to the west!   He broke the morale of nearly every single unit in very short order!  It was a like a domino effect and I nearly cried in shame watching it happen.  It happened because I hadn't properly rested my men and because my overall army morale had been depleted in earlier attacks.  It was a lesson I have never forgotten.
Overall army morale tells you if you have enough strength for an individual charge or rally.  Overall army moral is crucial because it allows you to charge at the crucial moment.  When everything is about to turn against you, and you have to retreat your opponent with your attack, have you ever been dismayed to learn that you don't have enough morale to conduct this crucial attack?  This may be because your overall morale is too low or that unit is simply beat up.  Paying attention to your overall morale so that it is available when needed is a critical skill for the budding guru.
Many good players seem to charge every time they attack until they run out of morale.  I wonder if any of them have ever studied cost/benefit analysis.   I nearly always consider whether the attack that I am preparing can generate enough morale points to recover the points expended in the attack.  Will this charge enable the next attacking unit to rout/surrender the enemy.  If it costs me 1000 morale and I retreat a unit twice, that should allow me to break even in the morale department.  If I can then rout or surrender them, I will come out ahead in terms of morale.  Now that doesn't mean that I let morale rule all my decision making on the field of battle, but it is ALWAYS a consideration.  If an attack is going to cost me 5000+ morale points, it is rarely worth it and certainly deserves a good long think.
Individual unit morale is also one of the critical elements that I have displayed on my units at all times!  This number determines the performance of a unit more than any other factor.  I have had units with a 60 firepower and 60+ morale in the woods retreated by a 20 firepower unit with only a 70 morale due to a charge!  Unit morale also is the best judge of whether you will have to expend overall morale for a charge.  Units with 80+ morale can nearly always charge without expending overall morale.  Less than 80 morale units usually require an expenditure in order to charge.  Sometimes when your individual unit morale has been 'inflated' by the routing of enemy units, you will even have to expend morale to get 80+ units to charge.  I know this sounds counterintuitive but long experience has shown this to sometimes be the case, much to my dismay.   
More information on morale will be found throughout this manual but I will address it in conjunction with the appropriate sections.