Yeh, read the play guide section on it, linked above.
Apart from that, the main things to remember is...
*Factions is basically capture the flag (sigil).
*8 towns can be captured (Brit, Trin, Glow, Mag, Skara, Minoc, Vesper, Yew).
*Need 80 stealing skill to steal sigils (doesn't need to be real skill, can use +stealing items).
*Control of a town gives the controlling faction special abilities for that town (faction guards, vendors, etc).
*In a faction you are freely attackable everywhere in Fel by opposing factions (enemy factioners will appear orange, unless they are a murderer).
*Points (and silver) are awarded for killing enemy faction players (see
http://town.uo.com/factions/factions_19.html).
*Each faction has a friendly monster (which will not attack you), and 3 'enemy' monsters which can be farmed for silver (and will give you skill loss if you die to them). Monsters are Silver Serps (TB), Demons (SL), Ogre Lords (MX) and Wisps (CoM).
*Silver can be used to buy Warhorses (from horse breeder vendor, placed via finance minister of a controlled town) and create faction items (see play guide).
*Warhorses are comparable in strength with a Fire steed (w/o fire breath of course), can be rezed with a single bandage (0 vet skill) and are specially hued for each faction. Deep Purple (awesome band btw) for TB, Maroon (BOOO!! NSW!! NSW!!) for Minax, what can best be described as Sickly Green for SL, and Sky Blue for CoM. NOTE colours are for 2D client.
*True Brits pwns all other factions cos OPK is in it...
Yer, and factions is all about funnn! No fighting over PS or items, no GZ wars... none of that. Its PvP without the BS, and you don't even have to be a PvPer, just about every template in the game (including pure mules) can be highly effective in factions.