I fear of it, this post might become nightmarish for you dear team!
Let's put aside the previous idea, our main options are: There are guilds, or no such factions.
For now i would like to point out some things about the first option. So we need guilds.
Let's face it: In terms of story, Morrowind takes the trophy yet it grants us a plague of immersion with the world, and that is our career in the guilds. In each game as i know our character climbs to the top, and rules over the guilds. By my point of view that's implemented quite wrong. It might seem rewarding to climb a ladder, but it just doesn't feel right. In 10-15 ingame days you can rush through the entire chain-of-command of a guild.
Now tell the scriptwriters and all everyone concerned to curse my name.
A guilds events you live through it's questline should be extended, or rather took into two parts.
The first is the well known visit location, do stuff. After all we have to use out this open-world. But!
There are arcane, fighting, sneaky, even religious organizations in a world. To really, and i mean really live out them capacity both in terms of story, gameplay and immersion, we need especially scripted quests for both of them. Out of these maybe the thief guild would suffice the least of such extension, but the arcane and fighting guilds needs them. To be frank, i might call these quests and the areas they took place in instances.
As a guildmember you can't always dally around the world. For example as a member of the Fighters Guild, you get a contract from a local ruler to put down a rebellion. The guild accepts the contract. You get a notification to join the group assigned to the task. You rush to the council, and prepare for the fight. "- Are you ready?" "- Yes i am!"
Choosing the acceptive dialogue should cut away your chance to dally around the world, no way! Accepting the quest you get warped to the location of the battle took from the main world as a limited area! That is in case of a quest that takes place in the open world area. This way you don't have to script all over the open world, but took these quests to modular level. What do you think,this would be beneficial in terms of the amount of content you put in a quest or not?
Before and/or after these battles i can see before me short cutscenes, with still images that tells about events or the daily life of the guilds. Such amount of possibilities to break away from the guilding system built by Bethesda...and such amounts of work.

The variety and immersion with the concerning guilds might be lifted enormously.
God. I feel so bad now.
