Fallen Earth's faction system, and the latest GamersFirst dev diary has the details. Lead designer Marie "Aro Sei" Croall says that the devs "want to make sure it is clear to all players who they are fighting for and who they are against."
The current faction dynamics can be confusing, she explains, and GamersFirst feels that Fallen Earth's learning curve can be smoothed out "without dumbing it down." To do so, shoulder factions are being removed, and wastelanders will need to pick a faction and remain loyal to it in order to earn points. Missions may be accepted from three factions, but only the primary faction will determine PvP objectives, missions, and faction channels.
Finally, the devs are removing factional friendly fire except in cases of clan wars, bloodsports, or dueling gameplay. Croall says this is intended to curb same-faction griefing, and ultimately contribute to "a less jarring PvP experience in Fallen Earth."