Naval warfare is the competition of sea-going power between nations at war. While a majority of warfare is land-based, the naval aspect of conflict can be incredibly influential in the spheres of trade and conquest.
When a battle is started every ship will attempt to target an enemy ship to deal damage to. What determines their success is their positioning value, which is derived from their leading admiral with a random element. Positioning is re-rolled every day of battle.
In an ongoing battle bad positioning will result in picking a new target, which if you are unlucky could mean finding no target, or even targeting one of your own ships. If a friendly ship is targeted the ship will always try to pick a new target next day.
Damage is dealt in a similar way to in land battles. Offensive modifiers and dice roll is reduced by the enemy defensive modifiers and dice roll. This is then further increased or decreased by the specific modifiers on either side for Strength Damage or Morale Damage.
Ships that have no morale left will retreat from battle, ships that have no strength left will be sunk.