From Ryzom Wiki
The Higher Powers
This use matches general online games lingo because most games make players choose between two opposing sides referred to as the two factions.
In Ryzom specifically, until recently Faction points could only be earned with the Kami and the Karavan, and Faction PvP was always Kami versus Karavan. This is no longer the case (see below) but the terminology has stuck.
Though it is often used so informally, no official source refers to the Kami and Karavan as the factions; they are referred to as the higher powers, the religions or the cults.
The Higher Powers and the Nations
- Faction points can only be obtained with the 2 higher powers and the 4 nations.
- Faction PvP can only be done in name of the higher powers or the nations.
Thus this would seem to be the most formally correct use of the term factions, however it is rarely used this way in conversation.
The Higher Powers, the Nations and the Neutrals
From the very beginning, the players who didn't align with any faction and thus remained neutral have often been referred to as the third faction (in the case of the higher powers) or the fifth faction (in the case of the civilizations). It's a matter of opinion whether neutrality is actually a faction or rather the lack of faction.
This issue was only complicated further when different kinds of neutral were implemented: Hominists who are friendly with all nations, Marauders who are hostile to all nations, Theists who are friendly with both higher powers and Antitheists who are hostile to both higher powers. All those groups also get their own Faction PvP icon.
And ofcourse, there are still the remaining neutrals who don't fall into any of those groups. So all in all there are now 6 different neutral factions.
The Higher Powers, the Nations and the Tribes
Depending on context
Lastly, factions may be used to simply refer to the different sides in whatever conflict is currently playing.
For example, the Kitin might be referred to as a faction, even if players can't get fame with them nor align with them.
The Marauders also were often referred to as a faction long before players could support them