I'd also suggest some sort of sense of time. If I have a military that looks good on paper for some reason--say it's sitting next to a bunch of starbases near my homeworlds--the AI is impressed. Never mind that I have 10 tiny fighters and they have 10 battleships and 40 cruisers. On the other hand, I can take over literally two dozen or more planets in one week with only 6 Huge ships and a lot of transports, and the AI will mock me for my lack of a military. And then they lose the rest of their planets the next turn.

Also, Alliances should be taken into account. If I'm allied to the Altarians, and they have the strongest military in the game, and they're between me and the Drengin, the Drengin will declare war on me and promptly be stomped to powder by the Altarians. More importantly, I get a negative diplomacy modifier every time someone declares war on my allies because I, apparently, am auto-declaring war on the aggressor. So, after a few war cycles, my neighbors--even if I was on good terms with them, and have never maligned them in any way--will permanently hate me, and refuse to agree to peace with me because I "repeatedly declare war after suing for peace." I mean, duh, they should be able to tell that they are actually the ones declaring war on my alliance!

Torian are supposed to be good, but instead they're really evil. They're crazy to go to war at the first chance they get.

Thanks Iztok.
I had heard that too, since I started this thread.

In one game summary, my 'most powerful ship' was a Star Base that I had maxed out with weaponry.
So maybe Starbases are included. I dunno.