Morale is a game mechanic which determines at which strength your units fight. Morale is implemented into the game to give smaller players an advantage towards the larger players; If you're put next to a 30k player with your little 175 point city, you wouldn't stand a chance. With morale, your have a slightly higher chance: Because of the players' size, he has lower morale when attacking you (30% for example), so his troops will fight at 30% strength instead of 100% strength. The larger the difference in points is, the lower the attackers morale is (if the attacker is larger).
You can not get morale higher than 100%, so if you attack a larger player than yourself, you won't get 110% morale, it will stay at 100%.
I hope this information is sufficient. If not, please state so