What must be known regarding Military Control is that it is not binary. In most games, you either possess a region or you don't, period. Not so in AACW, you can have a share of the region and your opponent can have the rest. Just imagine that, as in real war, you hold a part of the region, and your enemy is just 5 kilometers ahead of your positions and is ready to welcome you if you try to go on the offensive. In the game, you can coexists in the same region without fighting your opponent if both armies are in defensive posture; and both can also entrench! If one switches to Offensive mode, it won't get any terrains benefits but your foe will. And if you succeed in inflicting more losses compared to him, even if he doesn't retreat you will have gained ground (expressed in ... military control percentage as you probably guessed). This can occur up to a point where he has such a small percentage that he will have no others option but to switch to the offensive (this will be done by the engine as a mandatory posture) or retreat.
Another set of niceties impacted by this rule is that if you don't hold part of a region while you cross a river, you are considered to cross it under fire. On the other hand, if because of a previous action you already have a given percentage (11%+) representing a bridgehead, an army crossing it and attacking the enemy won't suffer any penalty.
Military control can be gained rather easily when you are alone. Leave some units in a region for 1 or 2 turns and voila it is entirely yours. If there is a enemy, the percentage won't move at all unless you gain some ground with an assault. This helps the game simulate intricate situations like the Petersburg siege, where each side was facing each other on a 30 miles long network of trenches and had to use all kinds of tricks to gain some ground (see the Battle of the Crater for one truely amazing story of what happened during this siege).
Finally, military control is heavily tied to the concept of zones of control. This feature represents how tightly an army asserts its control in a region, in case of enemy presence. Each of your stacks generate ZOC points in the region they are in (and not to adjacents regions, contrary to boardgames). This ZOC rating will lock enemy into place, preventing them from bypassing your army to wreck havoc in your rear (but cavalries and irregulars are adept at bypassing ZOCs!). See the screenshot below for a example of this feature.
On this screenshot, the AI sent Magruder's Division to push back the Peninsula Army. After a short fight, the Union detachment (not a real army as you see) breaks battle and retreats into the town, still in the same region. Now if you select the Union stack, you see that the region behind the CSA force is in red... why? because Magruder is preventing the yanks from moving past him towards Richmond. If you want more details, a tooltip also provides you with more information.
One of the advantages of posting these shots for everyone to look at I suppose.
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