The answer is yes.

Playing with 3-4 heroes is a legit tactic in the game.

How it is done is that when the player creates the character, they go through the tutorial or the first six levels which is controlled by the game, forcing a player to take on mikaela and karen. When it comes to the other heroes,  you will have the option of deploying them or not.

Why play with only 3 heroes ?

The answer is that you can save yourself a lot of extra time and effort by only having 3 heroes. It gives the advantage of faster item gaining ( weapons and armour ) the use of refining and Bless stones. It also allows you to stock pile valuable items like exp scrolls, bless and soul stones and only collect the heroes you want in your team.... it can mean that you can focus on getting legendary heroes for your team and only deploy them when you are ready to power boost them right up

Can you reduce your team down to 3 heroes later ?

You can replace deployed heroes but you can not remove them, so the decision to play with only 3 heroes, needs to be made at the start of the game when you create your character.

Is it a form of cheating or unfair game play ?

No, there is no requirement to play with a total of 5 heroes. In fact, teams with only 3-4 heroes can not use the ally system so players with 5 heroes do have that advantage. Starting with 3 heroes gives players more time to work on their team builds without wasting resources.

What is the Best 3 hero team ?

A healer and 2 DPS fighters or a a healer, a tank and a DPS fighter or 2 healers and a DPS, there is really no best team......

I am losing to a 3 hero team and I have a superior 5 hero team, they are using rage attacks faster than I can, so fix it.!!!!!

The simple answer is that a 3 person team will generate rage faster and thats why they can use rage attacks quicker