As to this point in its development, I'd say SWC has done a great job with faction conflict/competition. Up until recently we were basically a 100% economic sim. With the expansion of A/E, it's enabled a new element to the chess match of galactic territory controls. Now with the recent SimNews, the announcement of upcoming Facility Combat mechanics involveing heavy weapons, and not to mention the droid updates that make them much more viable in faction wars, the stage is set for more active faction military conflicts. It's only a hop skip and a jump from space combat and full-fledged PvP incorporation.
Since the Tax Nerf, the admins have been slowly pushing the Galaxy towards a more even playing field, and I think that the "Cold War" in place for the last several Sim years may be close to heating up. Credit to the admins for the work on the updates. Other SimNews has details on expansion of the Quests system as well, but that's best for another thread.
This has probably gone beyond the realm of "General Questions", but if you want to discuss it further, feel free to send me a DM