Shapechangers have an alternate form that they can freely assume.
Shapechanging happens in one of three ways:
Out of Battle:
The "Change Shape" task allows your Shapechanging Commander
to change form.
In Battle: You can script your Shapechanging Commander to Change Shape in battle. Just be mindful that you only have direct control of their first 5 actions.
Automatic Trigger: In battle, Shapechanging Commanders will automatically Change Shape upon "death" if their current form has LESS maximum HP than their alternate form. For example, an Arch Mage that is actually a Dragon will flip back into their Dragon form when killed, but a Nahualli will not be able to flip into their Turkey form if killed in their Human form.
Experience, Magic paths, and Afflictions carry over between forms. If both forms have the same slot, the Item in that slot will carry over too; if not, that Item is destroyed. Sure, these Magic Items can handle size-changes, but they can't handle shape-changes.
Some units have a less-controllable form of Shape-Changing that isn't listed on them as a trait in-game;
Units with a Wounded Shape will only take that form with the Automatic Trigger, and will return to their original form when the battle is over. You typically only see this on troops, such as the Jaguar Warrior, but some Commanders (such as Dai Oni) have it too.
Some units automatically Change Shape when below a certain HP threshold, such as Hydras. These units will return to their original form if their HP is brought above a different threshold, typically a point or two higher than whatever threshold gave them their current form.
Units with a Dying Shape will only take that form with the Automatic Trigger, but will not return to their original form once the battle is over. This mechanic is typically used to simulate extraordinary cavalry (such as Serpent Cataphracts) being dismounted in death but their mounts continuing to fight; thus, most of these units lose Experience and Afflictions upon changing form. A couple of these mounts, such as Turan Gryphons, will be remounted and Change Shape in their home province.