If you have played an game like Freelancer or WoW before you will instantly get this. The idea is simple, the more you kill of an faction, the less members of it like you. Violence wouldnt be the only way to affect your reputation however. Any time you do an action with an npc that belongs to one of the factions(not every npc picks a side, mind you, there are civilians without any faction too) your reputation gets modified dependant on what you did. The more you kill an faction's rivals they are likely to become more generous in trade, better reputation with an faction may cause crewmembers to instantly offer joining your crew, skipping whatever quest they had to offer, at maximum reputation they may even beam guard type npcs of the faction around you to fight as bodyguards for a limited duration, and offer unique quests to those they trust so dearly that may even result in otherwise unobtainable unique crewmembers. Similarly being at rockbottom with an faction may cause an kill-team to occasionally seek you out in the wilderness of the universe randomly ambushing and attempting to kill your char, at worsening reputation there may beam in additional guards whenever you approach an settlement associated with that faction, you may warned to turn away and fired upon if approaching one of their settlements and opt to ignore it. Additionally whenever you commit an crime against members of one race, it gets broadcasted to members of it's race, so you wont able to level an apex settlement on the planet only to get greeted friendly at the next one within the same system. Avians would have the grounded and the stargazers as factions. Normally you are welcomed in grounded villages and chased off pyramids belonging to the stargazers. Through an myriad ways you can turn it around and earn favor with the stargazers instead, earning their trust means to obtain precious ancient technology of this species. Apex have the miniknog and the rebels, the two being rivals of each other. The miniknog can offer supersoldiers at high repu, rebels are in control of an generous blackmarket where you can find basically everything at maxed out repu, the higher your repu the better offers. Hylotl have the traditionalists and the modernists, who are not rivals. The traditionalists look better on you if you go up against the florans as deep in their heart and minds they havent forgiven them, through using the scientific progress and combining it with tradition they are capable of crafting superior weaponry. the modernists value science above all else, they can teach you very effective synthetic food recipes or offer otherwise unobtainable augments for example. Florans have cannibals and "just floran"s, cannibals being enemy to everything. An cannibal would get to learn how to consume everything as food, probably. normal florans are superb beastmasters, you may even gain your own ixoling. Glitch would have dark glitch and royal glitch. An glitch falling to darkness will get to learn the secrets of REMpirism, becoming able to drain health off mechanical rivals and more, the royal glitch can offer unique mount like that robo-steed. Novakid have outlaws and settlers. Outlaws can teach you very effective mining, dont know what settlers would do. Also there would be generic pirates(the bandit npcs you meet) and occassus as factions(both are always hostile)
