It is not clear to me what are the condition to create new armies and army corps.
For new armies, once it became possible, I select a 3 star general (active, i.e. with a white envelop) and it is very rare it work. On the republican side, it happens only once in 3 games I was able to get more than one army (even in games running up to 1939). On the Nationalist side, It never occurred that I even get 1 army general (but in the latter case, it could be due to the fact that victory is very easy to reach in the early phase of the game so games are short). Create corps is even more abscond to me, the rule is basically: to test all active 2 and 3 stars general in the command radius of the army general and sometimes you may be granted!!
Do I missed other conditions: location, presence of Amry HQ (I don't know what is the function of HQ by the way, but I try and it didn't help), anything else?