For the record, someone suggested last strat that we bring the native factions to strategus...which I don't think is a terrible idea, then there'd only be 6 factions, and people could fight internally over control of the faction. You'd see more de-centralized power (common to the middle ages) than you do now with massive faction building, which you didn't see til the end of the medieval period.
Also the current smaller factions would then be part of a larger picture (if they wanted to be).
And you'd have to set diplomatic stances towards the other factions, neutral, defense pact, allies, etc. And only mercs or allies could sign up for you. There was actually a shit ton of great suggestions for strat about a year ago (starting in the fall of 2011, and going to the end of the year).
That might have been my 6 faction only suggestion.
http://forum.meleegaming.com/strategus-general-discussion/another-strategus-suggestion-6-factions-only/msg316452/#msg316452Basically everything would be almost exactly the same as it is now, you could create clans and fight anyone you want, but everyone would belong to one of 6 kingdoms or cultures that determined the color of your character on the map and any fiefs you take. So for example Nords would be blue, Swadians red, etc. People could change nationalities but there would be a cooldown.
Each color (faction, culture, whatever) would start out with homeland territories that would be AI controlled at first but players could attack AI fiefs in their homeland to have more control over them. Then the goal would be to expand your faction's color out until it controls the entire map. These could be the starting territories just based on native singleplayer:
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The second part of the suggestion was that in each cultural homeland, equipment that represented the culture would be heavily discounted. So Swadians would have cheap western European style gear, Rhodoks would have cheap crossbows and Italian style gear, etc. When you take over a territory, the discounts would remain the same so people might want to invade certain areas to get access to the gear. I thought this might get clans that like certain types of gear to group together so they'd be playing with people they might not normally play with, possibly breaking up some existing alliances and mixing things up a bit.
There would be nothing to stop clans from joining multiple factions (colors), working to advance some and sabotage others. This system might also get more people signing up for other peoples battle. If a NA sarranid is attacked in the middle of the night, some EU sarranids might be more likely to sign up for the battle because he's a part of their kingdom. This suggestion didn't catch on before so I doubt it would now, especially with this whole new version of strategus yet to be fully tried out.