Overall I like the faction system, but it needs a little bit of tweaking. The way it works now, by the time I learn anything important about a faction, I've already burned my reputation with one or more other factions and I can no longer work with them. This is how things have gone for me so far:
First I meet the Forge and the Mask. Then in the city I meet the others. I have quests from all of them. I went to the Swamp first, and sort of got stuck there doing Forge quests. Each time I finished one of their quests, I used the camp there to take a long rest, and after the long rest I was asked to talk to their leader again. After a while, I get asked to talk to him again, but just speaking with him causes my reputation with the Rebellion to tank and I don't know why at this point. I reload a save from before talking to him and just leave to do quests for the other factions.
I was asked to free a prisoner for The People faction at Feleg outpost, and I was also asked to clear the same outpost by the Mask. Both tell me that the outpost is occupied by the Dominion. I've already made up my mind that I don't like the Dominion, so I go there do do both, however when I arrive, I find the outpost is occupied by the Rebellion. I'm able to free the prisoner using an invisibility spell, then I leave because I didn't want to anger the Rebellion as they're the only ones that seemed to know anything about this Marin Ving person I'm looking for. I suspected either a bug or The Mask is lying. I saved, and cleared the fort to see what happened, and then the quest updates to tell me to to go back and ask if they knew the Rebellion was there. I could clearly see that it was the Rebellion and not the Dominion without needing to kill them. It seems this could be fixed by giving the option to go ahead and kill the Rebels and claim the outpost, or go back and tell them the Rebellion is there BEFORE killing them.
I'm now doing quests for The People and the Rebellion. The People ask me to free some prisoners from a secret outpost. I find two and free them, then later find the last one that turns out to be important (I forgot his name), and now have three options, let him go, escort him back to The People, or kill him. Either of the options burns my reputation with one faction or another. This could be fixed by adding a 4th option to leave him locked up until I decide what to do about him. I load a save from before talking to him and go about business.
Now I'm basically left with quests for the Rebellion. Eventually I arrive at their base and it goes to a cut scene where they say the Dominion are storming the place and I have the option to help them fight or leave. I decide to help them fight, and after the fight I'm told to go speak to someone. Speaking to him immediately tanks my reputation with The Forge before I even know what's about to happen. I go ahead and meet with their leader, who I decided is a creepy old dead guy that I don't want to work with, so I kill him but now I can't go back to helping the Forge if I wanted to. This could be fixed by not tanking your Forge reputation until you meet with this Anfarel guy and either agree to keep working with the Rebels or kill him.
So now I'm at a point where if I even talk to the Forge or Rebellion leaders, it kills my reputation with the other, and if I complete my current quest for The People, it kills the reputation with another. I don't even know what the Forge is wanting yet, because I reloaded after talking to them killed my reputation with the Rebellion. I also don't know what the Mask faction is about because I haven't really done any quests for them to find out because doing their quest early in the game would have ruined my reputation with the Rebellion before I knew anything about them.
Now that I know I don't want to work with the Rebellion, I'm going to go do the quests for The Mask until I find out more about them, but it feels wrong because I only know what I know about the Rebellion because I went through with their quest to find out, and then had to reload before doing it so I didn't lose my reputation with the other factions. So far the Mask already seem shady, so I suspect I'm probably going to take The People or Forge side unless I learn that the Mask is going to bring about world peace and give everyone in the valley free kittens and puppies.