How did Gideon win his battle against the Midianites?

The Midianites were a demoralized army, ripe for defeat.

First, when the original Israelite army of 30,000 assembled, it basically cut off the Midianites' food supplies. They could no longer send raiding parties into the surrounding countryside without their being captured. So the Midianites had to survive on whatever supplies they had on hand.

Second, when most of the Israelite army marched out, the Midianites didn't realize that they were leaving. It looked to them like the Israelis were trying to surround them, further adding to their confusion and panic.

Third, it has been said that a good spy is worth more than a good general. God was the "spy" of course, and knew how demoralized the Midianites were. That's why he told Gideon to use "shock and awe" tactics.

In a "normal" situation, a night attack is the hardest thing for an army to defend itself against. They're not ready for an attack, and in the darkness, can't distinguish friend from foe. The attackers usually have some identifier, such as strips of white cloth.

If the Israelites had actually launched a night attack ,they would have taken some casualties in the resulting melee. But they simulated a night attack, and let the Midianites "fight it off," which really meant fighting (and destroying) themselves. God knew what he as doing when he used unusual tactics.

Not being able to read God's mind I cannot answer your question as to what his plan was, but I will tell you why I believe he did it.

God told the Israelites that if they would serve him he would give them the ability to overcome 100 to 1 odds.

Lev 26:7 through 9 KJV

7 And ye shall chase your enemies, and they shall fall before you by the sword.

8 And five of you shall chase an hundred, and an hundred of you shall put ten thousand to flight: and your enemies shall fall before you by the sword.

9 For I will have respect unto you, and make you fruitful, and multiply you, and establish my covenant with you.

He also told them that if they did not serve him he would turn that around.

Lev 26:14 and 17 KJV

14But if ye will not hearken unto me, and will not do all these commandments;

17 And I will set my face against you, and ye shall be slain before your enemies: they that hate you shall reign over you; and ye shall flee when none pursueth you.

There are many other promises that God made to them in Leviticus chapter 26 concerning what they would go through if they did not serve him, and you might enjoy reading them.

Israel had been undergoing all of those circumstance for decades prior to Gideon's day.

I believe that it was God just keeping his word.

God's plan had very little to do with the tactics employed. Indeed, God's purpose in downsizing Gideon's army was specifically to de-emphasize the role of man in the conflict. To wit, Judges 7:2 states:

The Lord said to Gideon, “The people with you are too many for me to give the Midianites into their hand, lest Israel boast over me, saying, ‘My own hand has saved me.’

As to the method employed, Judges 7:22 answers this - God used the confusion in the ranks of the Midianite army to set the Midians against themselves. It is written:

22 When they blew the 300 trumpets, the Lord set every man's sword against his comrade and against all the army. And the army fled as far as Beth-shittah toward Zererah,[a] as far as the border of Abel-meholah, by Tabbath.

2 Chronicles reports a similar thing when the Ammonites and the Moabites rose up against Israel under King Jehosophat. Jerusalem itself was besieged, and there was famine so great that women resorted to cannibalism. When the Lord hear the Israelites' cry, however, he chose to rescue them. The text states:

20:22 As soon as they began singing, the Lord confused the enemy camp, 23 so that the Ammonite and Moabite troops attacked and completely destroyed those from Edom. Then they turned against each other and fought until the entire camp was wiped out! 24 When Judah’s army reached the tower that overlooked the desert, they saw that every soldier in the enemy’s army was lying dead on the ground.

For a disciplined army to turn on itself, the confusion must have been great indeed. The point in each of these narratives is simple - it wasn't the Israelites who conquered their enemies. It was their God who fought on their behalf.

And, finally in 2 Kings 19, the Assyrian Sennacharib brought an army of 185,000 to lay seige to Hezekiah's Jerusalem. The prophet Isaiah was moved by the spirit to tell Hezekiah that the Lord would deliver, and sure enough:

35 That night the angel of the Lord went out and put to death a hundred and eighty-five thousand in the Assyrian camp. When the people got up the next morning—there were all the dead bodies! 36 So Sennacherib king of Assyria broke camp and withdrew. He returned to Nineveh and stayed there