Well we do not have a deadline, and the game will only be as good as our imagination, so why restrain ourself already? As long as it will be playable while we build it then I see on problems in being ambitious.
The standards of AAA games are always rising. Therefor, the game will be un-completable.
Well for our current backstory there is no way we can just build creatures from each faction, and let each keeper collect creatures based on their alignment. The problem is that each faction by design is diametrically opposite, having two creatures from different factions would lead to the creatures killing each other, so the strongest pool of creatures you have from one faction would survive. This happens because the story-logic is defined in this way in the backstory section of the wiki.
You wouldn't have creatures that are diametrically opposed to eachother in your dungeon. With the 4 factions you have currently, it isn't completely neccesary for each to hate eachother to such an extent. For example, I can see that Humans won't get along with Corpars or undead, (although you can incorporate evil humans to the human faction, like necromancers and blackgaurds, who would, and who would also get along to some extent with the human faction still, save for the totally righteous humans), but Humans wouldn't mind Constructs so much (especially if you think that not all constructs are part of the "construct rebellion). I don't see why Corpars would hate the undead or the constructs so much, etc.
I am not sure you catch my drift here, you talk about the alignment system having a taste of RPG game-play but you also say that the backstory/story-logic does not matter, so I wonder which RPG's do you play if the story-logic does not matter? You can consider the backstory and the game-story as one and the same continuing story, the backstory is mainly there to help aid in the design process of the game, and hopefully for the player to appreciate it
Nowhere did I say the "backstory doesn't matter", or that story logic isn't important. The thing is, is that changing the backstory is far easier than changing the game, and limiting the gameplay to things that the backstory mandates is silly. Also, any non-linear RPG has a backstory that doesn't define the exact actions of what the player will do is in the situation that I talk about.
As I said before I would like to hear just a rough sketch of what the set-up will be like? And in your terminology what the game-story will be? (again just a rough sketch would suffice).
For the overworld- story mode, think of all the factions you've defined now as story factions. These guys give out missions and own different parts of the world, doing missions for them increases your reputation with them. Your aim is to become as powerful as possible, and you do that by taking over parts of the world yourself. You can do this in a number of ways, taking missions from one of the factions only, getting a good reputation with them, and having them reward you with lands (or choose you as their leader), or you could play the factions against eachother, only taking missions from the highest bidder, or you could just attack the lands you see as the weakest, without the help of any of the factions.
For actual gameplay, you'd need to make inbetween creatures not strongly aligned to each faction ie. not all Humans are part of the Righteous Kingdom, not all Constructs are part of the Rebellion, not all the underground denizens are Corpars, not all Undead are under controll of the Great Liche or whatever. These buffer creatures would allow for flexible gameplay while you build up your playstyle to match that needed to get units from the paragon factions.
Then, of course, there is the option of having an "Avatar" that pre-biases you to one of those paragon factions (in story mode, you'd have 1 avatar that gets bias from the factions he does missions for etc)