More, and More.
The histories I have read about this art really don't tell us much. Liuhe is thought to be the older style. I find it difficult to believe, but Liuhe was taught only to Muslims before 1949. Wow, there is some truth there but at some point they must have been teaching others because it's supposed to be the older style.
I do think liuhe is actually an older style because wuxing seems to have become simpler, perhaps even gentrified. (George Xu used to say "think kill!" when we practiced liuhe.)
The main weapon of war for the infantry for most of history was the spear. A phalanx protected by a small cavalry was very difficult to beat. Cavalries with huge Arabian horses became a cult of the emperor by the time of the Tang Dynasty (cavalries were later used by the Mongolian hordes conquered the world) and they were formidable, but training war horses was harder and more expensive than training huge infantries. The spear remained very important until the invention of the gun.
Spear training is evident in luohe xingyi both in the stepping and in the shrinking of the body size, not to mention the turning maneuvers and the focus on forward movement. I really can think of no martial art that is better designed for fighting with a group in tight formation, shoulder to shoulder.
I have heard that xingyi was officer training for the infantry but I don't know of any facts to back it up.
Another theory goes that xingyi could be practiced on the thin paths of the rice paddies and in small places (as opposed to Shaolin which needs an open court yard or a walled park). It could be practiced on the road, going and coming from work.
Update: China From Inside is a pretty good site.