Matchmaking works by power level and not crown count, or age of keep. So, if you are finding them in MM, or they are finding you, that means you are fairly evenly matched as far as your overall power level is concerned, so you are not being penalized at all. As far as the crown count difference is concerned, I'm sure you are not complaining about it when you attack someone with more crowns than you, so....
How does matchmaker work? Why am I being matched against people with way more crowns than me?
The factors that contribute to who you get matched against are your “power level”, which is based on the upgrades you’ve purchased both for units and buildings, and the number of people close to your power level who are currently available to be attacked. Keep in mind that not all Age IV players are much weaker than those in Age V. An Age IV player that only has his keep left to upgrade and an Age V player who has only upgraded his keep are effectively the same power, and we account for this.
In addition, the game presents a range of potential targets; enemy castles that are more or less powerful than you can be potential matchmaking targets. This gives players an opportunity to challenge themselves or to go after a weaker player. We scale potential resources with this as well: attacking a stronger player nets you more potential resources while attacking a weaker opponent means less potential resources to raid.
Because making matches is highly dependent on the number of players available to match to, there will never be a system that is "balanced" all the time. The total pool of people who can be matched against is changing all the time so the way matchmaking feels, subjectively, changes as people enter and leave different levels. It also changes based on the number of people with peace treaties. Higher level players also tend to be more active and also get longer peace treaties. Ever person under a peace treaty is removed from the match pool so each player's pool of potential matches is fluctuating constantly.
Since the launch of the game, we have never taken your crown count into consideration when matching you with opponents. However, as you climb the leaderboard, matchmaker starts to skew things toward people with similar crown counts.
We keep you "logged in" for a few minutes after you log off, so that intermittent loss of internet connection due to bad cellular or wireless connections won't immediately open you up to attack.
What are power levels? Where can I find out what mine is?
Your castle's power level is the sum of the power of its offense and defense. It does not correspond with your crowns, your castle's age nor your siege results. You can raise your power level by upgrading buildings, walls, defenses and troops. You cannot lower your power level. Each building you build/upgrade and each troop you upgrade irreversibly adds a little bit to your overall power level. We do not know how much each building/upgrade attributes to your power level.
The game does not disclose your castle's power level to you. You have no way of finding out your power level on your own. However, you can tell other people's castle power levels because the loot in the chest you recieve when you destroy a keep is calculated based on your opponent castle's power level:
Calculations for normal chest:
Power level = (Amount of food - 25) / 60
Power level = (Amount of wood - 25) / 60
Power level = (Amount of stones - 15) / 30
Power level = (Amount of gold coins - 1)
Power level = (Amount of pennants) / (1 + Reward Chest Bonus)
Calculations for jackpot chest:
Power level = (Amount of food - 75) / 180
Power level = (Amount of wood - 75) / 180
Power level = (Amount of stones - 45) / 90
Power level = (Amount of gold coins - 3) / 3
Power level = (Amount of pennants) / (3 + 3 * Reward Chest Bonus)
Example: If you smashed the castle of your enemy and got 1525 Food in the chest, his power level is 25.
Some players have made the effort to collect these values for an assortment of players. Your castle might already be in the lookup sheet found here: AoE CS PowerLevel lookup sheet
Why is my castle being attacked by someone 1, 2, or even more ages more than me? How do I overcome this?
Again, matchmaking is based on the power level of your castle, not on the age of your castle. So it could well be that a highly upgraded Age 7 castle has the same power level as a barely upgraded Age 9 castle. If this starts happening to you, consider it time to age up. Because with every other upgrade to your castle in your current age, you risk only make it worse. If you do not like being matched against higher ages, then do not upgrade everything before you age up. Consider not upgrading troops and heroes that you do not use.
Caveat for lower age players with many crowns:
There used to be a loophole where low age players (often done in Age 5) could stop upgrading and grind enough crowns to grow to such a number that they'd appear on the top 200 leaderboard. (One guy, Cavalry Cat , reached first place this way.) Due to the high player population in lower ages, it is very rare to get attacked. And because high age players could not attack low age players, those grinding low age players were essentially immune to ever losing crowns. To constrain this a new rule was introduced. Basically for each age there is an unknown crown cap, that once exceeded opens your castle up to attack from higher age players. The "Cleverly Cat Flag" you can buy as an honor item in game is also a reference to Cavalry Cat's clever strategy.
Should you find yourself falling under the "Cav Cat rule," aging up your castle will get you rid of those high age bullies.
I seem stuck at this number of crowns, I can't find more, what's happening?
If you do a constant number of attacks per day, you'll gradually gain crowns at an increasingly slower pace, and after some time you'll reach what is known as a 'glass ceiling'. Your castle has a power level, and matchmaking is based on it. Because crown rewarding is based on a levelling system of diminishing returns, this means that each power level has a distribution of crowns. And as you gain more crowns and approach the top crown numbers for your power level, you'll find it increasingly hard to gain more crowns.
To find more crowns, you must therefore either increase your attack frequency, or move up in power level (or both). You will directly find out that you've moved up a bracket in power level once you encounter castles (whether in defense or offense log) with such high numbers of crowns you never saw before.
A way to assess your crown growing potential is perusing your defense log. As long as there are many players in there with many more crowns than you, you've still got headroom to grow crowns at your current power level.