A complex system of factions exists in WoTMUD, some of which are easily understandable and identifiable to a newcomer unfamiliar with the Wheel of Time book series and some of which seem to cut across other factional lines and are a bit more opaque to the uninitiated. All factions in the game are definite reflections of Robert Jordan's story world, though the issues of contention and current interests of some factions are a shifting thing which is player driven.
In-game factions include racial conflict, national conflict, clan warfare, tribal warfare and sectarian and intra-sectarian warfare, all in addition to the overwhelming (yet sometimes subtle) influence of the Dark One's war against all which pits Light versus Dark in a much grander way.
Race is the primary and overriding factor which determines factional rivalry. Wheel of Time can be described in one sense as a game world which describes a three-way racially defined struggle over control of the world. The factions are: Human, Seanchan and Trolloc. No race gets along with any other and all are at a predetermined state of war for very deep and un-rectifiable reasons. Trollocs will always kill humans and Seanchan on sight, humans will engage trollocs and Seanchan on sight, and Seanchan will aggressively pursue either of the other two if encountered. The exception to this is that humans and seanchan will often have a temporary truce if shadowspawn are in the area. This behavior extends to racially defined mobs as well, so a Seanchan weapons dealer and his guards will attack (or "aggro" in MUD parlance) a human entering his shop without any other apparent cause.
The "normal" characters in the game which relate most closely to the main characters in the books are the humans. The human side is often called the Light Side (or "LS" for short), though this is actually an oversimplification and the proper definition of the Light and Dark Sides are a bit more complex than this. Though Seanchan are actually humans as well they are a breed apart, literally, and have serious and irreconcilable views of the world which mandate mortal conflict.
There are several human nations containing territory which comprises the majority of the game world's space. These nations constantly experience some level of friction with one another, though there is not always enough stress present to force conditions of war all the time. National conflict is a subtle, but sometimes violent, influence on other factional conflict. Some nations sponsor clans and host them in their capital cities which can add another layer of complexity to inter-clan warfare, even when both clans and both nations are considered "Light Side" and are common enemies of both the Dark Side and the Seanchan.
Various human nations can be selected when creating a character and will grant bonuses and minuses to statistical attributes depending upon the class of the character and what that nation is generally well-known for. Shienar, for example, is well known for strong warriors and therefore grants a bonus to strength and constitution, whereas Two Rivers folk are known for being hardy and impossibly stubborn and therefore receive a bonus to will and constitution. Homeland decisions can affect some aspects of role play ("RP") and depending on a player's desire to be involved more heavily in RP or player killing ("PK" -- war with other players instead of mobs) can make this decision important for more than the simple quest for superstats.
Humans are the only faction which can be channelers as trollocs are entirely lacking in this ability and channelers are enslaved from birth in Seanchan lands. This is both in line with the book storyline and fills a dynamic and interesting place in gameplace balance.
These are the vile, hateful, warlike enemies of all order and reason, hellbent on the destruction or subjugation of the world. These characters are better described as humanoid monsters than anything else. They bear strong resemblances to certain animals (wolves, bears, boars, etc.) and are generally very strong, very fast, very durable, very stupid and have a very low willpower. These creatures, being minions of the Dark One, can see in the dark and are tailored for killing and little else. Unlike in softer, more general-appeal type games such as World of Warcraft where the Horde side exhibits "redeeming" features and soft and cuddly emotions, trolloc players will never experience anything other than the cold, hard, deadly world of destruction, war and player killing.
The DS area is far to the north in an area called the Blight. The Blight is a nasty place void of any controlling polity and has no geographically defined factions. The trolloc factions are split along clan lines only, and as trollocs exist only to kill clans are built around PK and little else. This PK focus to the DS makes it unfavorable for those who wish to engage in light RP or not pursue a course of constant violence against other players. Whereas LS players can be "hardcore" PKers, DS players have little else to do than become hardcore killers. This is both the appeal and the objectionable point about the DS depending on a particular player's goals and point of view.
Game mechanics dictate that trollocs face a variety of minuses to character formation including receiving fewer practice points per level, lack the ability to ride mounts, suffer from being unbearably stupid and almost always are lacking in willpower. The balance to these minuses is a higher pool of movement points, a greater chance to "stat" high strength, dexterity and constitution values and the ability to survive from eating slain humans, Seanchan or other trollocs. Though the minuses are somewhat counterbalanced by the bonuses received, the practice point minus and the general lack of intelligence act together to force trollocs to become more specialized in their killing skills and sacrifice the more pleasant skills -- but then again, trollocs exist strictly to serve the Dark One, after all, and pleasantries are not on their list of priorities.
Previously trolloc characters were created with no homeland options and stats were rolled (randomly generated) based upon class and the fact of being a trolloc. More recently a new creation system for trollocs has been implemented in which a player can select what "stock" a character is from. Stock selection influences character stat generation and the outward appearance of the trolloc as each stock is an animal form. This system works in parallel to the human homeland system and gives players a chance to influence their characters stats to a finer degree than simply picking a class and hoping for the best.
These people are human but have a significantly different history from the ordinary Light Side humans and are in a condition of constant war with them for deeply ideological and political reasons. Whereas the human/trolloc or Light/Dark conflict paradigm is straightforward and needs no explanation, a full explanation of the Seanchan and human rivalry as well as the Seanchan's parallel war against the Dark One is something which is simply too complex to get into here. While reading the books is the best way to learn about this unusual racial faction it is not necessary to fully enjoy WoTMUD, so long as one does not waste time trying to somehow create a "good" Seanchan character or even define Seanchan as good or bad.
Just as trollocs and humans automatically engage each other and have built-in barriers to communication and cooperation which generally enforce the status of war between the races, Seanchan experience the same mechanics which generally preclude friendly cooperation with anyone other than other Seanchan.
The Seanchan are in political control of both a separate continent which is difficult for humans and trollocs to invade and have a foothold in a few towns in the far west of the main continent which connects them directly with the rest of the chaotic world of WoTMUD.
Seanchan have a limited homeland selection system which works in a similar way to the trolloc stock system or a cut-down of the human homeland system. As the Seanchan have a singular polity and very few intra-factional rivalries these homelands play a far lesser role in RP than on the human LS. Seanchan characters are comparable to humans LS in most ways including stats, mounted travel, identical skill practice systems and item selection, but also have a few PK-focused perks available which appear only on the Seanchan side. This is balanced by the fact that the SS player base is much smaller than the human player base and they are constantly engaged by both humans and trollocs making the SS a choice for more experienced players in the same vein as the DS.
The Dark Side's influence can cross racial lines and is unique in this regard. It is not strictly true to say that all "LS" players are actually trying to advance the purposes of "good", though it is generally true to say that every trolloc and DS player is a vile and murderous instrument of destruction.
Clans exist in every racial faction and each has its own focus and place relative to its side.