Mike has explained beautifully the structural relevance of the pronouns in E; Let me add to it the logical part. If any doubt lingers in our mind in re: to the appropriateness of any one of the two referents, let us momentarily insert each one of them and see which one fits logically.
In the 1560 Battle of Okehazama, in which the warlord Imagawa Yoshimoto was defeated and killed, Oda Nobunaga recognized that, although his men were outnumbered ten to one, the terrain gave them a decisive advantage.
The gist of the text is that Oda eventually won and defeated Imagawa, although Oda’s team was a small one; Oda’s men still won because the terrain was advantageous to Oda’s team. The decisive advantage was for the Oda’s men and not for Imagawa’s men. The victors were the Oda’ men as the choice clearly makes out. . That clears the ambiguity of the pronoun them.
Second, the conjunction although implies that the smaller team eventually won, in spite of the smallness. If the victors were the fewer Oda’s men, the losers were the Imagawa’s greater number of men, because they were the ones decimated.
Logically, both the pronouns smugly befit Oda’s men.
Thanks Mike for your excellent thread