I doubt that's how the discussion went. Let's face it: Matt Firor knows that faction vs faction vs faction PVP at end game is a great way to keep a player base entertained. So, he designed this time period on Tamriel to be very chatic with a large war taking place over the capital. The factions might not make sens in Skyrim terms, but at least give them a chance to explain them through lore in the game. I think you'll be pleasantly suprised.
Yep, and I'll definitely give it that chance. The issue I have is that I started playing MMOs before WoW was released. I was lucky enough to play Lineage 2, where there were no pre-defined factions. Your guilds were called Clans, and Clans could be united to form Alliances. Those player-created and run Alliances were the powers in the world, and would fight for control of castles in each territory (read: Provinces). Sieging and capturing a castle gave your Alliance the ability to tax all sales made in that territory, not to mention the bragging rights of being in control.
I remember Todd Howard making an awesome speech during Skyrim's marketing about how he realized players don't need to be controlled in games. Give them the tools, and they'll create their own experiences. The more tools at their disposal, the more likely they'll create enjoyable experiences, even if that simply involves watching the sun set over the horizon. Well, that's what was so great about Lineage. Those Alliances were constantly shifting and expanding. Occasionally they were completely torn apart from the inside. If you were at war with another Alliance, there was also a genuine reason for it. Ever since WoW it's just been
"I'm killing this player because the game says he's my enemy." I really thought the diverse cultures of the races and provinces would have made a perfect setting for player-driven politics and alliances again - especially with the Imperial City as the ultimate goal.