Warband determines how many military units you may have at once. Your Warband size can be increased by increasing the amount of your different training camps or by upgrading them.

Your Warchiefe/Berserker/Armored Bear does not count as Warband.

Your military units count can be higher than your Warband size. You get no penalty for that.(e.g. When you have a maximum of military units and you loose a training camp)