There are five factions in Mount&Blade. Each has a distinct visual style and rules a certain area of the map. Joining a faction is a central element of the game, but you can also choose to support a claimant's rebellion or become a masterless warlord.
Joining a faction
In order to join a faction you will need to build up at least 150 Renown; raising your relations with the king will allow you to join with a lower amount of Renown(5 less renown needed for joining per relation point). Once you have built up this amount of Renown you will start getting offers from kings interested in having you as a vassal; refusing an offer lowers that king's reputation of you, and if it falls below 0 he will no longer offer vassalage. Once you have sworn an oath to a king you will no longer get offers from other rulers.
You can also enter the service of a king by becoming a Mercenary Captain and earning enough Renown to become a fully-fledge vassal.
Rewards and duties
Once you have sworn your oath to a king his enemies will become yours; your relation with the faction you just joined will be set to 12, while your relations with those at war with your new faction will be set to -40. These values will be set regardless of what your relations with those factions was before entering the service of the king.
Once you have been sworn in you get to choose a banner, which will fly above your party and any towns and castles you own (if you chose the impoverished noble background during character creation you will already have a banner). You will also be granted a village fief, which will always be the poorest village the faction currently possesses. Fiefs generate weekly income, so visit regularly to collect your taxes. You can acquire additional fiefs by besieging enemy towns and castles (see siege for more).
As part of your service to the king the faction's marshal may give you a Kingdom Army quest, which it is in your best interest to complete. Once you have built up sufficient Renown and won the respect of your fellow vassals there is a chance that they will nominate you for the position of marshal.
Marshal
The marshal of a faction has full control over war. As the marshal you cannot give out Kingdom Army quests but you can order around the other vassals (and even the king). You can order vassals to follow you, defend a particular location, or start or stop a campaign (starting a campaign will make a large number of the kingdom's armies start following you). Under certain conditions a vassal may refuse your order, but most of the time you will be obeyed. Vassals following you will join you in battle (including sieges) unless they flee from overwhelming enemy odds or get distracted chasing after enemy parties.
Rebelling
Each kingdom has a claimant, a person who claims to be the rightful ruler. If you wish you can join a claimant's cause and fight against the current king. Playing as a rebel is completely different from playing as a regular vassal. For more information, see rebelling.
Masterless Warlord
Another option is to set up your own faction. To do this, simply anger a faction until their opinion of you is at -10, then start besieging their towns and castles. Once you have successfully captured a fief it will become grey and be listed as (Faction Name) Rebels based on the faction you took it from. An entry for this faction will also appear on the Factions page of the encyclopedia. You can also do this after your request for a fief is declined, by refusing the money offered by your king. Instead, the faction you leave becomes your enemy as well as your previous ones.
Being a masterless warlord is a difficult route; unlike rebelling under a claimant you cannot have any vassals under you, and most lords will have a poor opinion of your actions. You will still have the faction relations you had before you began your conquest, and your enemies will attempt to capture your fiefs at the first opportunity. You are still able to make peace with them through the normal methods, but you cannot make peace with factions you have taken fiefs from unless you first return the fiefs to them.
If you subsequently join a faction or support a claimant all your fiefs will convert to that faction, but you will retain ownership. Your faction will also disappear from the encyclopedia. Because you already hold some fiefs you will not receive a village upon joining a faction.
While you are a masterless warlord, however, all nations will refuse to give you peace or to restore relations with them whilst you are a warlord, so I suggest you pick your battles very,very carefully. It is easy for a one-man-nation to quickly become overwhelmed.
Capturing/rescuing vassals
When you defeat an enemy vassal in battle he will usually escape; there is a 1 in 5 chance that he will fail to escape the battle, at which point you can choose to take him prisoner or set him free. Vassals cannot be sold to slave traders, but if you hold on to him long enough you'll get a ransom offer from his faction. If you accept the ransom, he will automatically disappear from your party or dungeon. If you reject the offer, you will lose Honor but the next offer will be for a higher amount.
Prison and escape
Captured enemy vassals have a 30% chance of escaping from your party or a 15% chance of escaping from your dungeon. Building a Prisoner Tower in a town or castle you own and garrisoning him there lowers the chance to a mere 5%.
Rescuing imprisoned vassals
If you defeat a party or conquer a town or castle, you will get to determine the fate of any vassals imprisoned there (they do not get a chance of escape). Vassals of your own faction will be set free automatically, but you get to decide what to do with neutral and enemy vassals. Setting a vassal free (regardless of his faction) will raise your relations with him.
Ransom payments
The vassal's faction will eventually offer you money for his release; the amount varies but it's always many thousands of denars (kings are worth the most). If you accept the offer he vanishes out of your party, but if you reject the offer you lose relations points as well as 1 point of Honour.
The advantage of rejecting is that you can capture all the lords and eventually hunt that faction's parties into extinction. Vassal prisoners are not restricted by Prisoner Management (you can even take them prisoner with no points in it), so you can catch them all without the skill's limitations getting in the way.
Ally trades
On random occasions, when you talk to a vassal he will offer to take one of your prisoners off your hands if you have captured someone from an enemy of his faction. You don't earn as much as you would by ransoming the prisoner yourself, but you get the money straight away and you raise your relations with the man who makes the offer.
On rare occasions a member of your faction will give you a quest to capture an enemy lord; this is another way to trade a prisoner for a relations boost and some easy money.