Undead units generally are not hindered by darkness, have high cold and poison resistance, and have high morale.
Some, such asand , are mindless, soulless, and have 50 morale. These will not retreat, but will dissolve on the battlefield if left without undead leadership.
Many other undead (for instance,and ) have minds, and follow normal morale rules.
From the manual:
Undead units are subject to banishment. Undead and demon units require undead leadership, which is generally conferred by skill in Death magic (or being an undead commander). Zombies aren’t going to take orders from just anybody. A squad that mixes undead and non-undead gets a -1 morale penalty, for obvious reasons.
In addition to banishment, undead can be targeted by some particular spells likeand .