The Golden Army is a term used to describe the best possible army in Vampire Wars, one that uses the best abilities and the maximum clan. With 500 friends and the player themself, the Golden Army uses 501 Offensive, 501 Defensive, and 501 Movement Abilities.
The strongest Bazaar abilities can be upgraded to maximum strength and are always available; even for new players. The biggest challenge and major drawback for getting 501 of these 3 abilities is the Blood Upkeep, which requires a sizeable amount of Blood generated from Minions to maintain. Another advantage is this process can be completed without spending any favor points.

There are a lot of Limited Edition or Rare abilities that outrank the Bazaar abilities in stats. Found through Combat, Akem's Gamble, Portal and other Events, Sagaan's Altar, or the Elder's. The major drawback to collecting these is the cost can become staggering, and the majority are only available for a limited time. Some of these abilities also have a limit of 1 per player.

The very best possible Offensive and Defensive army (as of November 1st 2011) requires the player to have completed several Events, reset several Events, complete Akem's Gamble sets, complete Collections, and purchased a lot of expensive abilities. In theory, this army would use the following abilities:

OFFENSIVE Abilities (Attacking)

1x * Erebus' Darkness *  Offensive 256 Attack 30 Defense (Akem's Gods of Night)

1x * Dam Buster *  Offensive 250 Attack 20 Defense (Akem's Epic LE)

499x * Chuck Kuk Do *  Offensive 250 Attack 00 Defense (Akem's Epic LE)

OFFENSIVE Abilities (Defending)

1x * Baba Yaga's Gluttony *  Offensive 150 Attack 115 Defense (Akem's Sorcerers)

1x * Poison Dart *  Offensive 130 Attack 110 Defense (Collections)

1x * The Guillotine *  Offensive 135 Attack 105 Defense (Collections)

1x * Make War Not Love *  Offensive 140 Attack 100 Defense (Collections)

1x * Doll's Revenge *  Offensive 180 Attack 100 Defense (Akem's World Portal)

1x * Shadow Wolves *  Offensive 180 Attack 100 Defense (Bombay Portal)

1x * Arm of Reckoning *  Offensive 180 Attack 100 Defense (Venice Portal)

494x * Psychopomp *  Offensive 150 Attack 100 Defense (Akem's Epic LE)

DEFENSIVE Abilities (Attacking)

501x * Cut Thread of Life *  Defensive 160 Attack 75 Defense (The Fades Event)

DEFENSIVE Abilities (Defending)

501x * Invoke Amdusias *  Defensive 63 Attack 212 Defense (Elders - SoS Day Sale)

MOVEMENT Abilities (Attacking)

501x * Call of the Wild *  Movement 150 Attack 50 Defense (Elders)

MOVEMENT Abilities (Defending)

501x * Conjure Paimon *  Movement 143 Attack 141 Defense (Elders - SoS Day Sale)

The approximate cost for these abilities is 137 775 Favor Points, not including the cost to win the Akem's ability sets.
Some players have glitched numerous copies of the 1-only abilities.

Any Offensive, Defensive, and Movement abilities with the strongest Attack rating may not have the strongest Defense rating. For example: A player with a very strong Offensive army might win battles started, but because their Defensive army is weak they could lose battles when attacked.
The formula used for Combat is still unknown, but the Attack and Defense rating of the players involved is another factor to consider.

It is not necessary to have a Golden Army to do well in Combat or Vampire Wars, and to most players it's not feasible. However it is a great challenge and something to aim for.

Thanks to Adam Weiler for the article!
source: vwwikia