Your face-off with the Emperor himself; Gulcasa. And he's got Aegina with him. Thankfully, if you didn't steal, her Zolfy won't be nearly as much trouble since she has no Revolution to back it up with. You can union with Kylier here, and she'll fire her cannon, and she'll be useful against the knights; try to keep the Knights off the southern pass, the roads. The Witches shouldn't cause too much trouble, but remember your own Witch (or Necromancer) if they do cause issues. Now Gulcasa. There's probably half a million different strategies for dealing with him, so I'm not going to list them here, but instead point you towards
this thread with many, many different strategies for the Emperor. Some you won't be able to exploit at this point in the game, some you may never be able to exploit, but it's definitely worth a look. Also, the Hero Badge, which gives All Ace or can be used for a series of items later on, can be obtained now. Have fun with Genocide~