I love the idea of player driven storylines and player led factions within a setting. The biggest problem with the concept is the requirement for high player count. A faction needs at least three players; typically one to lead, one to act as second in command, and one to do the dirty work (but another valid option might be the one who publicly leads, the one who leads from the shadows, and the one who is overlooked but who gets the faction ahead). This means a minimum of six players for two factions, but factions really start to get interesting with five or more players in each...and cross factional politics starts getting fun with three or more factions that are capable of playing off against one another.
So for my liking, this means a minimum game with three factions of five players, preferably more players in each faction, more factions, or both.
Once we start wandering down this path, the "non-leaders" can develop their own niches of value. A faction might need someone who handles the money, someone who fights well, someone who spies, someone who can work magic or craft valuable items, someone who controls the drug trade or some other illegal activity, etc. This allows cross factional story developments where each faction's artisan work together on something for the common good, each criminal wages a separate war outside the publicly visible eyes of the factional hierarchy. It also allows underlings to act as spies within other factions, and thus gain importance that way without become too prominent or notorious...some characters (and some players), don't like the limelight.
Mind’s Eye Theater (from White Wolf) did this politicking well, but the rules often got in the way of a good story and the combat system was atrocious. Australian Freeform games do it well also, but they tend to be one off events where the characters are pre-scripted by the GM, players don’t have a vested interest in the survival of their characters because it’s a one-off story.
My weekend of play with foam rubber swords leads me to believe that a boffer style LARP campaign could be brilliant for political action, but at the moment there are only eleven participants. It was only the first session, and it was designed to gauge one another’s abilities, but there is some potential.
I’m thinking of putting together some basic “behind the scenes” actions, based loosely on the system used in Mind’s Eye Theatre (and the Camarilla organisation’s refinements). In this system, each player would have a series of moves each month, to build wealth, fame, followers and influence in specific parts of the city. With the power base they are developing, they can make moves to become ruler of the city, or take on one another strategically without resorting to the direct forms of combat that might get them killed. Unlike the MET/Camarilla option, I don’t think players should be able to nullify events in motion, and there should always be enough distractions in the world that players are forced to decide whether to attack one another or attack the things from outside.
Individual players would spend action points to their factional leader (in exchange for the use of factional benefits, stronghold and equipment), the factional leader would in turn spend those points ensuring the factions facilities were continually improved (at best) or in working order (at worst). Experienced players would look for ways to bring new characters (and new players) into their factions, because they’d get the action points from these new recruits and thus their faction would become more powerful. New players would look for the best factions to join, choosing based on the benefits a specific faction might offer them. New players might spend a probationary period (one or two games) within a faction before they are allowed to become full-fledged members allowed to vote for leaders (or before they are allowed to challenge the leaders in combat). Players not belonging to a faction would be viewed as dangerous wildcards with little honour or respect.
These are early thoughts.