A Formation Fighter is used to fighting alongside his brothers-in-arms in very dense formations; unless they're a Bad Formation Fighter, anyway. A square's maximum amount of Size points is adjusted by the lowest Formation Fighter value in its square. For reference, units without this trait are assumed to have a Formation Fighter value of zero, so even one of them in the square holds the amount of Size points a square can handle at 10. The maximum number of units a square can have is 10.

For example, several nations have troops with Formation Fighter 2. For squares that only contain Formation Fighter 2's, 12 Size points may be accommodated; that's six Size-2's, four Size-3's, three Size-4's, and two Size-6's, but still only ten Size-1's. Arcoscephale has Size-3 troops with Formation Fighter 5, and it can fit five of those guys into a single square.

This is the "Bad Formation Fighter" icon, by the way.