The Night Witch will periodically spawn Bats, which are single target melee air units. This is similar to how the Witch spawns Skeletons.
Her Special Ability, Bat Swarm, allows her to explode into bats when she dies. The ability is unlocked at level 4.
Night Witches have no preferred target when attacking; they will simply attack the closest building to them. However, once they become aware of enemy Guard Post troops (either by being attacked themselves or being near another friendly troop under attack), they will leave their previously targeted building and engage the enemy troops instead. Once all of the nearby enemy troops are defeated, they will proceed to attack the nearest building from their current location.
The Bats spawned could be used as an advantage, by attacking as an air unit.
The Battle Machine works well with the Night Witch, as the Battle Machine has a lot of hitpoints to tank hits for the Night Witch while the Night Witch aids the Battle Machine from behind.
However, because Night Witches are ranged units, they are likely to travel around the outside of the base, not following the battle machine. You can counteract this by bringing Bombers and Raged Barbarians which will help funnel the night witches in.
It is a good idea to spawn her at the corner of the map, because she can stack up Bats before she starts attacking.
Placing one or two Night Witches a few tiles behind a Boxer Giant is a good strategy. The Giant will tank enemy defenses while the Witches summon lots of Bats and chip away at the enemy's structures without being targeted. This strategy, however, is vulnerable to Multi Mortars if the troops are not placed a few tiles away from each other.