The Paladin is a horse mounted unit who has the potential to use swords, lances, axes, and bows for their weapons. The only have the capacity to learn two of them, however.
Upgraded from the Cavalier, the Paladin works in the exact same way as their lower class. These units rely on their superior movement abilities to support their allies rather than attack head on. Because they have no real statistic strengths, Paladins are often used to aid characters from a distance, quickly block a wave of approaching enemies or (when applicable) use the rescue command on an injured or slow ally to bring them into/out of the battle.
Paladins are also capable to substitute for generals in sheer evasive abilities, speed and strength. They are very effective in disrupting enemy troops long enough for your units to get into position. Paladins are generally the center of attention when using this tactic and thus must either retreat or be rescued regularly later on in the game.