Trophies certainly do play a very large part in matchmaking.
It was only at the last update that they started taking TH level into account.
Since that last update, the matching algorithm starts by looking for players within +/- 200 trophies of you, and +/- 1 TH level.
If it doesn't find anything, either or both of those ranges can be expanded, although it appears that the trophy range gets expanded first.



