First levels in games are always easy. You're supposed to be learning how the game works, more than really fighting an enemy. In this one, your two objectives are to get a lair and hatchery. If you roam a bit, you'll find the increase level secret that will help you out beating the Lord. Not that you really need it - I bet the chickens could do that without any trouble.

Dungeon Keeper 2 Walkthough Index