This needs to be balanced carefully, I think, otherwise the PCs become puppets for NPCs who will always be swooping in to save the day, bail them out of jail, etc.
Absolutely. This element of the setting is the one that should most resemble fairy-tales in my opinion. You have plucky protagonists who are toppling powers, but are unable to rely on consistent application of violence to do it, because of the power of their opponents. But, those same opponents aren't able to squash PCs on a whim, either. Instead, while violence may be a possibility, some shared code of etiquette governs when it is permissible or legitimate, and when it is not, and much of one's forcefulness is being able to leverage the gaps in that code. So having NPCs just come in save the day (one of the great sins of actual PS adventures put out by TSR) must be used very judiciously, and is in a sense a reward the PCs should have to have previously earned through some other adventure, rather than just become a series of deus ex machinae.
Love it! I wrote a piece about the latter for the Oerth Journal last year at https://greyhawkonline.com/sdm_downloads/oj31/
and would love to get some more ideas how factions in a PS (or generally-multi-planar) setting might differ from standard factions in dungeons and earthly campaign settings.
I think they should have speculative, metaphysical bents that translate into political programmes and bases of power. The more abstruse the metaphysical idea and the more far-reaching the consequences, the better IMHO. Islamic and Christian heresies are ideal for this, as are anti-colonial religious movements from early modernity.
Here's a few ideas off the cuff:
1) A faction that believes that the universe is rightly governed by a closed nomological network of objects interacting in rule-like ways, and the gods, undead, unapproved magic (there is of course, one good kind that they allow), and other supernatural phenomena are actually breaking apart the universe with their manifestations, introducing entropic decay and eventually causing the death of the universe through their careless vandalism. They are organised as a series of militant orders who disagree violently on priorities and methods to resolve this problem. They have infiltrated the police, jailers, orphanages, and of course, the bourgeoisie. Sub-factions disagree on what the network is made up of, how it should be characterised (mathematically, statistically, or logically), and whether the militant sects should be formal hierarchies or flat networks organised around powerful and charismatic individuals. They are currently besieging the heart of reality, from whence divine power originates to the sub-nodes known as gods, and are opposed by coalition of divine entities, both wicked and blessed, who seek to stop them via a combination of legal perfidy and military defeat.
2) A faction who believes the entire universe is constructed out of words and numbers, but actually only four words and six numbers, out of the infinities of each that are possible. Discovering and understanding these four words and six numbers gives one absolute power over reality. They believe they have one word and two numbers, that one of the other numbers is in the hands of one of several rogue branches who believes that there are seven words and four numbers, and that a partial definition crucial to understanding one of the words is found only in a dictionary written by a lunatic and long-lost in a difficult place to examine for traces. They are organised as a series of monasteries, universities, and other corporate bodies with an illuminated elite at the centre of each, and a cadre of scholar-assassins serving under them. They are the healthcare system, as well as the educational system, and are popular with urban elites, literate professionals, priests (who all assert that their god knows the relevant numbers and words) and the various classes of grifter who survive through their wits and command of language. A group of mind flayers recently ate the brain of someone who knew one of the numbers and are now petitioning to join, fully persuaded of the truth of their cause.
3) A faction who believes that strife is the ultimate expression of the generative power of the universe as well as its foundational state, providing the arena and incentive for personal excellence to manifest. Though warfare is exalted by the outer members of the faction, its inner elite know that truly, calendrical manipulation, a strenuously unpleasant regime of ritual sex, capitalist business practices, and pseudo-democratic politics are the most exquisite forms, and they throw their energies into these. The faction controls numerous municipal governments, sub-bodies, boards, and businesses, is quite popular amongst the bourgeoisie, and utterly dominates the banking and legal industries. They also have several armies on hand, are well-represented amongst the upper ranks of devils and demons, and are generous patrons of the arts. Their current goal is to convoke a formal debate in Heaven to persuade the angels of their views, a synod they are widely expected to win, even by the angels, who are engaged in sharp dealing to make sure the greatest opponents the factions can muster are otherwise occupied when it finally comes.