Create a faction based on lore.
-Where was it founded?
-When was it founded?
-What affiliations does it have? Hammerfell? High Rock? Morrowind? Multiple provinces? No provinces? Branched off from another faction? Etc etc.
-What are it's ideals?
-What does it do? Fighters Guild takes on contracts to help people, DB kills people for money and Sithis, etc etc.
-What has it done? History, notable people, etc etc.
-What inspired this faction for you? In game factions? Stuff from the books? Etc etc..
These are more like guidelines. Be creative and hae fun with it: