This paper presents a combined numerical-theoretical study of the macroscopic behavior and local field distributions in a special class of two-dimensional periodic composites with viscoplastic phases. The emphasis is on strongly nonlinear materials containing pores or rigid inclusions. Full-field numerical simulations are carried out using a Fast-Fourier Transform algorithm [H. Moulinec, P. Suquet, C. R. Acad. Sci. Paris II 318, 1417 (1994)], while the theoretical results are obtained by means of the `second-order' nonlinear homogenization method [P. Ponte Castaneda, J. Mech. Phys. Solids 50, 737 (2002)]. The effect of nonlinearity and inclusion concentration is investigated in the context of power-law (with strain-rate sensitivity m) behavior for the matrix phase under in-plane shear loadings. Overall, the `second-order' estimates are found to be in good agreement with the numerical simulations, with the best agreement for the rigidly reinforced materials. For the porous systems, as the nonlinearity increases (m decreases), the strain field is found to localize along shear bands passing through the voids (the strain fluctuations becoming unbounded) and the effective stress exhibits a singular behavior in the dilute limit. More specifically, for small porosities and fixed nonlinearity m>0, the effective stress decreases linearly with increasing porosity. However, for ideally plastic behavior (m = 0), the dependence on porosity becomes non-analytic. On the other hand, for rigidly-reinforced composites, the strain field adopts a tile pattern with bounded strain fluctuations, and no singular behavior is observed (to leading order) in the dilute limit.