The Dragon is a fearsome flying unit and is capable of attacking both ground and air units. Unlike the Balloon, the Dragon is both ranged and deals splash damage, like the Wizard.
A Dragon does short-range splash damage when he attacks. This can only be noticed when used against Clan Castle Troops and Walls.
The purple Dragon icon shown in the Barracks is actually a level 2 Dragon. The Dragon changes from green to purple after upgrading, matching its image in the Barracks.
Dragons have no preferred target when attacking; they will simply attack the closest building to them. However, once they become aware of enemy Clan Castle troops, Heroes or Skeleton Trap skeletons (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.