Yeah that's the game. I did enjoy the original Colonization as a kid but now as a grown-up I'm a bit torn about whether to get the remake, because of its historical setting.
I can only speak of Age of Wonders 2 as I haven't played the original. It's like a crossover between Civilization and Heroes of Might and Magic. You build cities, manage populations, do magical researches, etc. Like HoMM it goes into a separate tactical mode when enemies are engaged.