Factions are one of the major aspects of the game. When you first join Galaxy you are greeted with a menu to create or join a faction. Each faction will have a certain name. The players who create the faction get to pick the colour and name of that faction. There is a max of ten factions on per server (Five for galaxy arcade) and no more factions can be created during endgame. Factions are able to war each other or ally with each other. Each faction comes with its own starbase if that or all starbases that faction has are destroyed it is defeated and that team is removed. Before endgame, if a faction is destroyed, another can still be created as the max limit is ten factions in each server.
The player who creates the faction is the leader. This gives them permissions to upgrade their Starbase(s), declare war, make peace, and propose alliances, as well as other faction management options. After the leader leaves the game or faction, another player is selected leader at random, or the leader can appoint someone else as the leader to take their place.