There's something strange about how conflicts seem to work in the world of fantasy games.
First of all, everyone inhabiting the territory that belongs to a faction is part of that faction.
Secondly, everyone who belongs to a faction is automatically on all out war with everyone belonging to factions which are at war with ones faction.
Thirdly, regions are inhabited exclusively by one race. Also, regions inhabited by a race always exclusively belong to one faction. Should the previous rule not hold true, and areas inhabited by a race belong to different factions, the people of this area are bound to have vastly different qualities based on which faction's area they belong to.

In other words - choosing what you look like decides who you will be friends and at war with for the rest of your life.