Wars happen pretty much in Slugterra, but not too big enough to destroy the world. Since there are so many bad guys around trying to doom Slugterra, the heroes must stop them. A war will ensue anytime.
From what I understand is that Chi, as what Junjie said, is actually a "life essence" - in Slugterra, it is Slug Energy.
Chi embraces all manifestations of energy, ranging from material to non-material. At the Surface, we have different kinds of chi: from the sun, from petroleum, from nuclear reaction, etc. All of them are different from our own chi - the Slug Energy. So if a war breaks out on the Surface, it is highly destructive because opposite energies cancel each other out, rendering both energies to be almost useless or too little to sustain life. This theory also applies to the same destruction of both Slugterra and the Surface if both worlds met and started a war on each other.
But in Slugterra, Slugs share the same energy as all other living beings in Slugterra. Though, it is worth noting that slugs can pose danger to people if not handled properly due to the energy being contained inside them and can be highly reactive. This applies to the machines powered by Slug Energy, which also explains why Cave Trolls, scientists, engineers and technicians are qualified to handle it.
The phrase "Slug it out" may seem primal, but dueling is highly acceptable in most caverns, generally the wild caverns. If it is a residential cavern, they may provide a clean space for dueling or they might forbid dueling due to the safety of the ordinary citizens. Slugslingers are the ones who can control slugs and their slug energy, while normal civilians have little to none for that particular skill. Though, normal civilians can recover in a short amount of time if they have been attacked by slugs thanks to their own life essence. If a slugslinger cannot control a slug (like the slugs being powered up in Club Slug), the slug energy from that slug can injure the slinger himself and the normal people. This is because the slug energy from that slug has gone "rogue" (unstable and not properly converted and contained), which is highly reactive and dangerous.
However, if there is a war between Slugterra and the Deep Caverns, it is likely to be highly destructive due to opposite energies. However, if one side has more energy than the other, the one with the more energy will win. For example, Guardian Slugs and Megamorph Slugs can fight back normal ghoul slugs because the slugs have more slug energy to fight back the ghoul energy emitted from the ghoul slugs. Though, the inhabitants in the Deep Caverns can also win if their ghoul energy is more powerful. For example, the Emperor's action in ghouling slugs increases ghoul energy that will eventually weaken the Guardian Slugs if the slugs are not replaced by even stronger ones.
On the other hand, too much slug energy can render a cavern to be inhabitable. For example, the Lightwell, where slugs go for a recharge, has an abundance of slug energy. The slug energy around the cavern where the Lightwell is located is so much that no living beings live close to it. Even the Shadow Clans cannot approach it close or their powers will be limited. This hints that too much slug energy is harmful towards other living beings due to our limit in containing and converting the slug energy for our survival. The excess energy that cannot be properly contained and converted can become toxic, which will lead to sickness, cancer and possibly a slow death. And yet, too little energy has pretty much the same effect as too much energy.
In conclusion, I don't see much issue in starting a war in Slugterra (come on, dueling in teams are pretty much similar to a war). After all, dueling is pretty similar to an action of a war. As long as the duel is carried in a suitable place (you cannot destroy important habitats like in the Jungle Cavern in "Endangered Species" for the sake of the slugs' source of food), without any unprotected civilians, use the right slugs and the slingers can handle them, I don't really see much of an issue. Just... remember to get an insurance (Yes, Slugterra has insurance companies!)
P.S. Sorry if I write too much about this. This is all of my research on the science of Slugterra based on my understanding in science and Chinese medicine.