Factions and how to prevent abuse

[Steve Kort]

Each faction must have at least one fixed enemy Big Box factions may have 2 or 3.

I agree.  And I don't want to include currently-NPC factions in our list of enemies/allies.  I'd like to see at least one playing "enemy" and one "ally" for each faction.  These do not have to be reciprocal either, and it would be nice if there were some inbuilt tensions there, such as being friends with someone who's also friends with someone you don't particularly like (or might even have on your "enemy" list).  I'd like to be able to draw an enemy/ally chart between all the factions and see lines to and from everywhere.

"Enemies" don't have to be all-out warfare on encounter (in all cases), but they should at least refuse to associate with one another under normal circumstances and have significant disagreements in their outlooks (which could lead to harassing, name-calling, fist fights, etc.) when in close personal proximity in cities.

"Allies" don't mean unconditional friends, but other factions with whom they tend to cooperate or work well with, in general.  You might like to give them better deals on trades/tasks, for instance, or engage in communal movement or activities.  Perhaps "preferred associate" would be more meaningful?

What could we do to update our designs along these lines?

First we would need a set group of factions that we are going to have in the game.  Before we try to create any sort of a tree of enemies and allies. 

I see the Ring and Gift as enemies of the Banner as they are religous zealots and even though they worship the same god They see them as a threat to their beliefs and way of life and would really just want to keep them far away.  They likely see each other as allies to protect themselves from the Banner.