There are two Diplomacy phases each year, Spring and Autumn. After each, if retreats are necessary, a Retreat phase happens. After Autumn (or Autumn's Retreats if there were any) there is a Builds phase for building or destroying units. During all types of phases, all units act at the same time.
During a diplomacy phase, players are able to act with all of the units they control.
If a unit moves (with enough support) into a territory that another (enemy) unit occupies, the targetted unit is dislodged and must either retreat or disband (be removed from the game). Options for retreating are territories that it could have moved to during the last diplomacy phase. It can not retreat to the territory that the dislodger moved from, or into a territory where other units bounced. If two or more units attempt to retreat to the same territory, they are all destroyed instead.
After the Autumn diplomacy and retreats, if a player has more Supply Centers than they have units, they may create units in the supply centers that they started the game with. If they do not own one of their starting supply centers or if it is occupied by any unit, it cannot be built in. If a player has more units then they have supply centers, they must destroy (disband) as many units as needed to have the same number of units remaining and supply centers.