Saxony is a german minor sandwiched between Prussia and Austria. Her population is small and her avenues of expansion are even smaller. What she does have is one of Europes strongest economies per capita with 1 iron and 2 coal provinces, which after clean coal should fill your pockets handsomely. In the beginning you should do the following to secure a strong future economy. Mobilize the army and create 2 more divs. These will be used to get some sla.. factory workers who will convert your precious coal and iron into steel. But where can such a small country as Saxony get national pops at this early stage? Well, Hannover for starters, she is currently a British satellite but will revert to the warm german womb in just a few months, which is why the first thing you should do is declare war on them. That stops the event from triggering, and you avoid having the bloody Göttingen professors making your liberals go monkeypoop.
So where was I? Yes, Hannover. Simply use Göttingen as a staging ground for your forces as they never have troops there and can't get there since they lack a land connection. Once that is taken go directly for the capital. Have you captured it? Good, ask for peace and demand they become your satellite, this will give you all their land except the capital. They should accept, if not simply capture some more provs. Once they fold just station your army at your newly acquired coastline (I've never had the brits land any troops. But just in case) and ask for a white peace with the limeys. It might take a few tries but the AI will accept that it is impossible after a while since it can't reach your capital in the heart of Europe.
Your satellite should now have revolted from you via the previously mentioned event and you are in control of 1 million more germans who work in useless RGOs and are thus very useful for industrial purposes. Build a steel mill or what have you. If you want to go Laissez Faire you might want to promote a capitalist in one of the provinces since the capitalist POP is still stuck in Hannover's capital.
But where do you go from here? Well the choice is yours. You can play aggressively and take Schleswig-Holstein for the profitable Cattle RGOs and the useful Canned Food factory. Or you could decide to be a big fish in a huge pond and eventually get gobbled up by the shark that is Prussia.
If you want to face down with Prussia you will have to have 20-30 divisions. Good luck!