You're right--that's how you make a map 2v2v2v2 (writing in <Item>2</Item> 4 times in a map's map-tag.xdb file, in Wordpad or something).
But to clarify on how to make the actual teams:
Open the map's larger xdb file (Warlords is M4.xdb), also with something like Wordpad. Go Edit > Find > team, and it'll go to this line:
<CustomTeams>false</CustomTeams>
Obviously, you'll want "false" to be changed to "true".
Keep searching for team, and not too far below the CustomTeams line, you'll find:
<Team>1</Team>
This exists within a large chunk of script under an <Item> heading; there are 8 blocks of this, because you can at most have 8 players. Get it?
The number 1 can be 0-4; 0 means that player is not considered, as in, the Warlords map will now be 7 players if you changed this to 0.
I believe each block of this script corresponds to a colour...so the first instance of:
<MainTown href="https://www.celestialheavens.com/forum/topic?p=48658#xpointer(id(item_e748a92a-02b0-4f39-be30-51bb100cbfdd)/AdvMapTown)"/>
<MainHero/>
<ActivePlayer>true</ActivePlayer>
<Team>1</Team>
<CanBeHumanPlayer>true</CanBeHumanPlayer>
<CanBeComputerPlayer>true</CanBeComputerPlayer>
<Behaviour>PB_RANDOM</Behaviour>
<CaptureAbility>0</CaptureAbility>
<StartHero/>
<HeroInTown>true</HeroInTown>
<ReserveHeroes/>
<AddHeroTrigger>
<Action>
<FunctionName/>
</Action>
</AddHeroTrigger>
<RemoveHeroTrigger>
<Action>
<FunctionName/>
</Action>
</RemoveHeroTrigger>
<VictoryMessageRef href="/"/>
<DefeatMessageRef href="/"/>
<Race>TOWN_RANDOM_TYPE</Race>
<Colour>PCOLOR_NEUTRAL</Colour>
...is the RED player. The order is as follows:
RED = 1st instance
BLUE = 2nd...
GREEN = 3rd...
YELLOW = 4th...
ORANGE = 5th...
TEAL = 6th...
PURPLE = 7th...
BROWN = 8th...
Since you'd like a 2v2v2v2, you'll need to change the number within the section of my above bolded script. Use 1-4, and think of them as team numbers, team 1, team 2, team 3, and team 4. Obviously, for 2v2v2v2, you'll have to change the # between <Team> and </Team> so you have TWO 1's, 2's, 3's, and 4's; 2 ppl or colours exist on each team.
Save, exit, and play.
EDIT: BTW, you want these to be TRUE in the above:
<CanBeHumanPlayer>true</CanBeHumanPlayer>
<CanBeComputerPlayer>true</CanBeComputerPlayer>