A faction is a group of allies, either racial or ideological.
Most in-game factions are described in Warcraft lore, but some were specifically introduced in World of Warcraft.
The concept of a faction exists primarily in World of Warcraft.
The use of factions in other Warcraft games is more for general grouping purposes and not quantitatively tracked like World of Warcraft.
The term faction is also used to refer specifically to the two playable factions in World of Warcraft: the Alliance and the Horde.
Each playable race (except pandaren) is specifically aligned with one faction or the other, and all player characters of that race automatically belong to that faction.
A character's faction has numerous consequences.
Characters can only talk, group, and create guilds with players from their own faction.
Certain zones and cities in the world are also friendly to one faction while hostile to the other.
The majority of the levelling experience will be determined by the character's faction, with different quests, NPCs and areas for each faction.
Faction also determines a substantial amount of play: characters will fight the opposite faction in battlegrounds and world PvP; work to raise their reputation and earn the praise of the heroes of their faction; complete quests to aid their faction's efforts, and frequently fight against the other faction's NPCs; and generally spend the majority of their time in their faction's cities and surrounded by other members of their faction.
Although many choose to play characters of each faction, some players develop a strong sense of faction pride, often leading to varying degrees of sparring and rivalry between players who identify with each faction.