Also, as referenced in this thread, as opposed to 'Good and Evil', I assigned a theme to each race (and expanded upon it)

Resolyn : Death Worshipping Caste system

-> Main inspiration was Hindu India, as well as Buddhism. Some scary parallels with Planescape dustmen.

Urxen : Social order and rapid growth, Religion includes harmony with beasts and worship of serpents (especially dragons)

-> Main inspirations were Confucianism and Taoism (ancestor worship, social order, Kohryu as world dragon/guardian of elements)

Trogs : Warrior Aristocracy focused on Competition and Honor in combat. (Main inspiration is Mycenean Greeks/ Achilles ... and a bit of Sparta too)

Magnar: warring factions held together (and kept civilized) by a magnanimous and immortal leader

-> No specific Inspiration

Kraxis: Masters of Diplomacy and Intrigue

-> No outside inspiration, but the pre-existing lore of Kraxis and the Kraxis symbol of a Spider certainly help

-> Also, as the only humans across the way, in empire territory, they would have to be masters of Diplomacy and Intrigue I think, lest they simply become the playthings of the other Empires (the Fallen races).

Seconded

I am curious to know how the lore will be shaped with all these new game changes coming out in the journals. It was made pretty clear before that Empires were not evil and Kingdoms were not good inherently. Has that changed like magic has, or is this moreso just an approximation for people to better understand the personalities of the Sovs? 

Using that kind of scale means that the game mechanics should change significantly. Will Lawful and Chaotic differences affect diplomatic relations, besides just Good and Evil? I am all for it if this is the kind of mechanic you want to implement, but if this is merely a cosmetic change, it will seriously detract from the game. I honestly prefer the previous lore about morality having less to do with things.

I'm not a fan of adding a hundred little things like custom buildings, equipment, and spells to every faction. It seems unnecessary and a drain on resources. Rather 3-4 large things should be added and they should make a difference in their own right. It just seems to me that all these items will be a huge drain on memory. I mean for cities to look different that means each faction is going to have a few custom buildings or different art for their improvements. That's a lot of work for very little gain, even just balance wise and the balance right now is already pretty bad. It is still early in the beta. Please try and get the city system working in a satisfying way before you start messing around with faction buildings.  

Also I am really concerned that we are moving away from customizable factions. Are all these items/buildings going to be tied to traits, or are they going to be unchangeable and tied to races? I really hope you don't go down the race path because it will kill faction customization. Even if you do keep all these things as traits ask yourself if all these items are really good enough that you would choose them over another trait. In the end having +1 damage on a early game bow isn't going to really effect strategy or immersion. Please please please keep all custom buildings, items, and whatever tied to faction traits!

Oh, well the names could be changed from "Necromancer" to "Magister" then.  Whether they're undead or not, they're certainly semi-fallen creatures that are bound to Ceresa through magic.

Except for all those traits you add in the custom faction creator which are in no way tied to race?

And I don't identify with evil.  Haven't played any of the evil races in WoM or FE, and probably never will.  So it limits my play choices.  But good/neutra/evil is a little better than just good/evil.

I would love to have the option of starting a random game where my sovereign is created randomly as well as everything else so I have no idea of the size or scope of the game I would be up against.  It would be fun not knowing how many enemies there were in the world, etc...

Maybe if it was rebranded Chaotic Kingdom, Lawful Kingdom, Neutral Kingdom, it would fit better with the lore we are already used to. 

I'm pretty sure the picture is not meant to be taken literally. Its just a general guide, the factions aren't being completely rearranged to reflect that picture.

I have actually modded in a complete race. The point is that the faction creator is a awesome feature that allows players to create there own worlds and civilizations, and if you are forced to mod in factions you are essentially cheating.

If the Lawful-Chaotic, Good-Evil matrix defined how diplomacy functioned I'd be comfortable with that. While Good-Evil is a little trite now-a-days it is an easy concept to grasp and instantly positions the factions with regards each other. Having traits that are only available to certain alignments would make the game interesting so I'm all for this. Perhaps diplomacy could be tied more to trait choices within the alignments than with the alignments themselves. For example, Good Chaotic races could have a range of faction traits including Interventionist while another race may have a trait called Isolationist. In the diplomacy setup, races with these traits would have a stronger hatred for each other regardless of alignments.

While the D&D thing threw me off the main point of the post, I have a few ideas about the other races I have played.

Here is how I think some of them should work diplomatically:

-Capitar: Relies on many treaties to gain resources and diplomatic advantages. If they are weak in the game, they are more likely to spend lots of gildar on making a trade treaty and caravan treaty just to get the bonus to diplomacy. Essentially they will rely on good relations and mutual benefits to avoid war with all but the most aggressive nations. If they are strong, they will do the inverse of that. They will still want trade, but this time it is only for the benefit of gildar. If your economy is too weak, they will attack you and take your lands, unless you have the means to persuade them otherwise. They are also likely to pay a trade ally that is nearby to annex your lands. As the Ferengi Rule of Acquisition say, "War is good for business." For Capitar money is power. They prefer to work with both faction sides, seeing that as the only logical way to really win. Their ideal goal is to have all factions at odds, with only Capitar as their friend.

I like the idea that they are not great at producing soldiers or buildings, but get bonuses to mercenaries and gildar producing improvements (which need some armor BTW). They should get a large reduction in the Rush Buy cost for production, allowing them to focus gildar on special projects when it is deemed necessary. It would be nice if they were focused mostly on the Civilization Tree, seeking to capitalize and expand as much as possible. 

It would work really well if they got more movement on roads, or perhaps upgraded roads very quickly as a race trait. They should be a Kingdom based on roads, relying on fewer armies, but fast movement and highly skilled mercenaries.

I noticed that there are 3 families that Capitar claims lineage from. We only currently see any evidence of Serrane. Maybe this is a chance to flesh out the history of the other 2 families with some unique buildings. A Mercenaries Guild would be something nice to add for Capitar. Perhaps they get a resource of Death Merchants, which are mounted archers and spearmen that have +1 to movement and +2 Initiative.