Disband is an ability unlocked after researching the Free Spirit Technology.
It allows you to remove any of your Units and get half the price in return. This value is rounded down. (i.e. If you disband a Defender, you will only get 1 star)
Disbanding Giants gives you 5 stars.
Disbanding will cause you to lose the points gained when training the unit.
When disbanding Ships or Battleships, you will not get half of the stars spent on upgrading back.