Oh boy... I actually remember asking myself this question while playing the game years ago. I'm almost through a history degree now; about a year ago I actually decided to go look at their history section in the menu and figure out exactly this question.

Obviously the actual tournament style game is completely absurd from the perspective of history because unless you allow for time travel there is no realistic scenario in which the Huns would have fought the Chinese.

The campaigns are interesting, and some of them show some interesting things, but obviously they sometimes bend facts and massively oversimplify things in order to ensure better gameplay.

The unit progression is also pretty absurd, but I think you knew that. In practice there was a lot of overlap between people who would be considered "Men at arms", knights, or a number of other types of foot or mounted soldiers. The term "Cavalier" originated as a term for the people who supported King Charles I in the English civil war in the 1600s. It doesn't make sense for "Cavaliers" to be an upgraded version of "Knights", and it doesn't make any sense for "Paladins" to be an upgraded version of "Cavaliers." Then there's also the fact that every civilization fights with more or less the same set of units. The unique units make (if it's even possible) even less sense. The Mamelukes were an army of slaves, primarily used in Egypt. They're roughly parallel to the Janissaries, or the Banner Armies of the Qing in China, in that they eventually came to form a hereditary (and largely useless) military caste.

What the Mamelukes were: An entire army consisting of troops with several different types of training corresponding to multiple, varied roles, as in most armies.

What the Mamelukes were not: A homogeneous horde of scimitar-throwing camel-mounted soldiers.

What the Janissaries were: An entire army consisting of troops with several different types of training corresponding to multiple, varied roles, as in most armies.

What the Janissaries were not: A homogeneous horde of white-robed foot soldiers bearing hand cannons.

But hey, I get it; gameplay is gameplay, and Age of Empires II is at heart a game, not a history lesson. But what really killed me was the "History" section. I went back there and looked at that too after I actually knew enough that I knew I'd be able to spot any glaring faults, and it was pretty absurd. It's very late right now, and I don't really have time to go into detail about it, but some of the facts in the history section are just plain wrong, and I particularly love the dates they used for the start and end of the different civilizations. They're totally arbitrary. I think it says Chinese civilization existed from 581 to 1644. This periodization makes no sense. The Sui dynasty was founded in 581, and the Qing Dynasty officially replaced the Ming in 1644, but these events don't mark the beginning and end of Chinese civilization in any way; they're simply part of the Dynastic Cycle.

I would like to elaborate upon the details in the history section itself further, but it is very, very late right now, and I need to sleep. In short though, it's useful in some cases as a very general overview of what political structures existed at certain points in time, but don't rely on it for anything beyond that. Age of Empires II is a game first, something else second and third, and I'd say probably an educational instrument 6th or 7th.

As ImmaRussian points out, AoE2 takes more historical liberties than other games for the sake of gameplay. An RTS will always be less complex than a turn-based game like Civ, so a simpler, more linear progression is, for me, excusable. Additionally, it boils history from 500-1500 into a single game session, so the civs represented are more amalgams than historical snapshots. They take interesting/(in)famous historical anecdotes and attempt to reproduce them in some fitting way. It's a clever way to represent something real without the ability to directly do that and to avoid a complex game (by 1999 standards of course :D). Some anecdotal things I've noticed they do get right:

• The Goths did play a prominent role in assaulting Rome in its later years, so their Huskarls get more pierce armor.

• The Inca road system, the Qhapaq Ñan, was quite impressive, as were the terrace farms of many ancient Andean civs; the Courier unit speed upgrade and farm build speed team bonus reflect this.

• Chu-ko-nu (though an archaic Romanization) were indeed repeating crossbows with a long history of use in China.

There's def other bits and pieces. But as said before, the concept is ridiculous enough that any idea of historicity is gone. Civs like the Goths and Huns were hardly contemporaneous with the Aztec, Italians, or Spanish. It's a game though. What's inexcusable is the "History" section. There's a transcription here. ImmaRussian already critiqued the Chinese, so let's look at some others.

The Maya section really belongs on /r/historicalcringepics. The dates are pretty good, and I appreciate the 1546 date, when the remaining highland Maya groups were defeated. The initial date is somewhat arbitrary since there's no good measure of when "Mayaness" begins. The whole thing on "nearly as impressive" and "less developed" is purely subjective and not worth saying. They did not only "live in small hamlets," but had many urbanized city states with smaller villages around them. The conception of sites like Tikal as just ceremonial centers rather than true cities is like 100+ years out of date. "Noble warriors and priests" did not control their society; instead, noble rulers sat at the top of a city-state's bureaucracy, which was composed of warriors, priests, lesser royal family members, scribes, and the like. These k'uhul ajaw did fulfill military and religious functions, but were still firstly a royal head of state. Many major lowland jungle centers did begin to decline in the 10th century, but natural disaster is not a likely candidate. Central Mexicans did invade; the famous Chichen Itza is practically a Maya-Toltec hybrid site. Of course, like most general histories, it ignores that the dispersal of lowland centers was contemporaneous with a rise in highland polities. Lastly, the last settlement was captured in 1546, not the 17th-century. They said this themselves, so it may be a typo.