A while ago, I came up with galactic factions idea, and have revised the concept a bit:

There would be limitations and benefits of joining one of the factions:

1. The Xenox faction, aligned with the Galactic Overlords
Fam leaders aligned with Xenox faction cannot declare war on another Xenox-aligned family
Fam leaders aligned with Xenox faction cannot declare war on a family of larger NW
Automatically accepts nap / pnap / alliance request from any neutral family or Xenox of larger NW
Fam leader has access to Xenox faction Galactic Congress
Xenox faction leader is selected by one majority vote at beginning of round by the minimum first 3 fam leaders to join the Xenox faction. This player retains power until end of round.
Families who join Xenox faction can be expelled from the faction at the whim of the Xenox leader
Xenox faction member family leaders can send aid to other Xenox-aligned fam leaders.
Once a family has aligned with the Xenox faction, it remains Xenox until end of round, unless expelled from Xenox faction by Xenox faction leader.

2. The Xentia faction, aligned with the Galactic Overseers
Fam leaders aligned with Xentia faction cannot declare war on another Xentia-aligned family
Fam leaders aligned with Xentia faction cannot declare war on a family of smaller NW
Automatically accepts nap / pnap / alliance requests from any neutral family of smaller NW
Fam leaders have access to the Xentia faction Galactic Congress 
Xentia-aligned Fam leaders can send aid to other Xentia faction-aligned fam leaders
Xentia faction member families can be expelled from Xentia faction with majority vote of Xentia-aligned family leaders;
Xentia leader is elected by ongoing majority vote of Xentia-aligned family leaders (just like fam leaders).
Once a family aligns with the Xentia faction, it remains Xentia until end of round, unless expelled by majority vote of Xentia faction leaders.

3. Neutral Fams stay as they are, except their fam leaders have their own Neutral Galactic Congress.  They can send request to join either faction at any time to be accepted or declined by the faction leader.

In this way, the Xentia faction would have to nap / pnap / ally and hopefully protect small, neutral fams, and will essentially make the Xenox faction fams the only fams in the galaxy they can war.  The Xenox faction provide a venue for those who insist on playing dishonorably to do so...

Story about the process of this change to the game happening here:
http://www.imperialconflict.com/forum/viewtopic.php?id=148825

In the future more stories or documents like it which record the progress of the development of IC, or player-written round histories, etc. could be discovered by players in game when exploring a planet - parts of a large epic story set in the IC universe.  The idea is that parts of this story are discovered as ancient rune artifacts when a player explores a planet, and the story pops up in the player's message center.  The player can read about previous rounds events, maybe even about their own previous rounds' exploits!