The population does not account for ALL YOUR UNITS in the field - but the TOTAL NUMBER of everyones units, meaning if you set a pop limit 0f 100 - with 2 armies, the maximum either side can build is 50 units (give or take, with upgrades and so on)

Id simply suggest a higher pop limit - try setting it to 300/400 units and you should be able to get 200 units a side in a 2 player battle.