And factions in modules help facilitate that. Are factions required? No. But they can provide a lot of added value. Otherwise you just end up with combat encounter after combat encounter.
The Heretic
It seems to me that, with creatures that aren't just bag-of-XPs or NPC-with-exclamation-point quest-givers, there needs to be some sort of challenge or conflict associated with it, or they aren't really gameable content. I mean, I have seen DMs who roleplay zero conflict conversations with randos, and while some people may enjoy it, I find it entirely empty (I hate small talk IRL, why would I want it in my RPG?).
To be gameable, either the creature wants something from you, or you want something from the creature. Either way, resolving that has to involve some sort of challenge, or what is the point of the game? The challenge could potentially involve something that does not involve other creatures, like natural obstacles, traps, or puzzles. But if you don't want an entire adventure based on that, then at some point you are introducing creatures that will oppose you.
Once you have a creature that wants you to do a thing, and other creatures that oppose you doing things, you effectively have factions. It is just that by default you are expected to choose a particular faction, the quest-giver, so there is no actual choice to be made.
Conversely, if you have creatures that oppose you, and you want the aid of another creature in overcoming that obstacle, and that creature previously had no beef with your opposition, then you are essentially
creating a faction. And again, if the module forces you to do so, there is no choice here.
In order for there to be real agency, I think the two sets of creatures have to already have some sort of actual or potential conflict, so you have a choice over whether to pick one, both, or neither.
So yeah, I think if you want to run anything resembling the sort of games we talk about here, having actual or potential factions is a best practice. And maybe the limitlessness of the human imagination come come up with something different, but I'm not going to assume it has done so until someone gives me an example.