Gather around kid, and I'll tell you a story about the militia unit that thought it could...
Okay, okay, no stories.
Management Summery
Militia are good for garrisoning towns to prevent raiding cavalry and other unpleasant in-laws and relatives (AKA raiders) from capturing them or destroying their supplies. Especially interesting in regions where you have low loyalty (Missouri) and if you lose a city cannot recapture it with cavalry alone.
You cannot fight a war with militia. You will get over-run, even if they are in their home state.
--
A little bit more info on militia and volunteers
Way back in AACW-I, depending on the year, militia had somewhere between 3 and 7% chance per turn of upgrading to conscripts, at which time they could be trained-up to line infantry by Bragg, Taylor, McClellan, Halleck or Sigel.
In CW2 the entire process has been revamped, and is still being tweaked. Basically each militia has about a 50% chance to gain 1 eXperience Point (XP) per turn. After gaining 20 XP they gain an Experience Level (EL) denoted by a star on the unit's unit display. Once the militia has gained EL1 there is a chance they it might upgrade to conscript, but what the chance is IDK at the moment. When they upgrade the lose about half of their XP.
Once upgraded to conscript, the whole processes starts over again until they upgrade to line infantry. Currently there is no way for line infantry to upgrade to elite.
As has been stated, militia have a malus of something like 10-15% when not in their home state, this applies to their strength and cohesion.
BTW, this also applies to Sharpshooters when they are not built into a division. There are also volunteers, which are like militia with an attitude. The Union gets a whole slew of these in the first year of the war in volunteer brigades (2 militia and a light infantry (which is a kind of precursor to the sharpshooters)). The different between the militia and volunteers is
- Militia always have a home state, out of which they get the 10% penalty. Volunteers often don't have a home state in this sense and thus don't have a penalty for being out of state.
- Militia upgrade and train-up* to conscripts.
- Volunteers upgrade and train-up directly to line infantry. Did you get that? directly to line infantry!

- A militia brigade (2 militia regiments) has a command cost of 1. If you think that a volunteer brigade therefore probably has a command cost of 2, you would be wrong. Their command cost is 3(!!), which means that before they can be put into a division they are really difficult to use. Once they've trained-up, the make great division fillers.
So, that's enough to get your heads a smokin'.
