How does Civilization 5 calculate who has the pointiest sticks?

Periodically, there is a list of "People with the pointiest Sticks" displayed in Civilization 5.

How is this value calculated, does it take into account the power of the individual units or is it based mostly on number of units?

And is this value also used by the AI to gauge the military strength of the human player or is that totally seperate? I remember a statement by one of the developers/representatives that the AI always has a rough guess of the player's military strength. But there are also indications that AI scouting is important for the estimation of the player's strength.

My personal observation is that the AI does significantly underestimate a small number of technologically superior units and mocks my puny military that wipes their army out a few turns later. I'm wondering if there are some facts about that known.

Solution 1:

I don't have any data to back this up, but I'd be incredibly surprised if it was something more than "each unit has a "pointy stick value". Add up the "pointy stick value" of all units you own".

That said, you could achieve your personal experience quite easily if the relative "pointy stick value" of a more technologically powerful unit isn't the same ratio as the increase in combat effectiveness.

There might be more concrete evidence in the XML, I'll see what more I can find.