So when Blizzard was making WoW they had a problem: their last game in the franchise, Warcraft III, added two more full blown factions to the universe, the Scourge and Sentinels. But during WoW’s development they did not have enough time, resources, and tech to bring these factions from the RTS to the MMO. So they compromised by adding Undead to Horde and Night Elves to the Alliance.
I think we’ve fully faced the effects of that understandable yet unfortunate decision in BFA where these factions from RTS games have been reduced to refugees or have their identity and leadership utterly butchered.
So I gave it some thought and here is what I came up with, using Wotlk as the cut off point for plot and character development but taking world building elements from other expansions and using it build up fully formed factions with 4 core races.
The Forsaken: A faction of cursed peoples and outcasts willing to do whatever necessary to continue to exist in a world that reviles and distrusts them. The dabble in dark magic, forbidden alchemy and are ruthless in their pursuit of vengeance towards those who wronged them.
Undead–the obvious choice to be the “core” race of this faction, based in Undercity and lead by Sylvanas.
Blood Elves–they too were victims of the Scourge and have cut ties with the Alliance after having been so badly insulted by them. I would re-emphasize their character from BC that had them dabble with demonic magic. Based in Silvermoon.
Naga–former Highbourne Elves twisted into monstrous scaled aquatic creatures lead by Queen Azshara who has created a new bastion off the coast of Lordaeron to bolster their Blood Elf and now Undead allies.
Worgen–what, Worgen with the Forsaken, you say? Well if we disregard the plot from Cata including the faction war that pitted these two against each-other, then actually Worgen have a lot more in common with Undead, Blood Elves, and Naga than they do with any Alliance race. They have been cursed, transformed into wolf-men. They are former Alliance who cut ties with them after the Second War, and they are monstrous and bestial like the Naga. Remove the dumb faction war aspect and they fit right in.
Sentinels: A faction of ancient, mysterious peoples dedicated to the protection of Azeroth from dark forces as well as maintaining their storied histories and cultures. They put heavy emphasis on ancient spiritualism, such as the Night Elves devotion to Elune and preserving nature, or the Draenei’s reverence for the Light and the Naaru.
Night Elves–the obvious choice to be the “core” race of this faction. Lead by Tyrande and based in Teldrassil.
Draenei–ancient and nigh-immortal like the Night Elves who share the same fierce determination to safeguard the world from Demonic and Dark forces. Based in Exodar, lead by Prophet Velen.
Pandaren–a spiritual people who emphasize martial arts and balance of character through monks. They have an ancient and unique culture they have taken along with them from their mysterious homeland. Based in the Wandering Isle which has moved to Kalimdor’s west coast.
Dragonkin–descendants of the Dragon Aspects, the Dragonkin seek to aid their Dragonflights in their ancient charge of protecting Azeroth from all manner of threats. For this purpose they have allied themselves with the most ancient and wisest of Azeroth’s peoples so that they can prepare for any enemy, ancient or otherwise, that dares to threaten the world.