Dungeon is one of the three evil alignment town types. As the manual states, Dungeons towns are built by Warlock and Overlord hero types to act as bases from which to wage campaigns of conquest for wealth and power. Similarly minded creatures are attracted as allies. Other dungeon creatures are in thrall to their masters. Dungeon armies are possessed of a variety of long ranged attacks, have effective damage dealing troops, and have the ability to greatly disrupt the strategies of their enemies. Dungeon represent Nighon.
Guardian of Earth (Grail Building) (+12 spell power to defending hero Dungeon special, else 5k Gold each day additionally, +50% creature growth like other Grail buildings)
Or, to not damage ones own units, the Armageddon's Blade (artifact), if tier 7 creatures of Rampart and some other immune units are not part of the opponent or can be killed later.
Upgrade your level 2 creature dwelling as soon as possible: harpy hags have a great base speed (9) and their attacks cannot be retaliated against.
Haste your minotaurs/minotaur kings. They are brutes which do a lot of damage and you _want_ them to strike at the enemy as soon as possible.
Plus, save obstacles, a hasted minotaur king can reach nearly any point of the battle field.
Discussion
Although dungeon is quite expensive, it has good magical capabilities (e.g. mana vortex) and powerful troops like black dragons, which are among the strongest creatures in Erathia.