The Elder Scrolls Online will divide players up into three playable factions, with a fourth political faction serving as the enemy. The latter is the Imperials, who have done a deal with Molag Bal and have intents on conquering Tamriel with an undead army.
The Daggerfall covenant is an alliance between Hammerfell, Highrock and Orsinium (the Orcish Kingdom in High Rock). Those looking to play a Redguard, Breton or Orc will find themselves signing on with the Covenant. These races aren’t exactly known for their friendly relations, with the Orcs in particularly barely even being recognized as a kingdom in their own right by the Bretons who rule over High Rock.
The Aldmeri Dominion is the second playable faction, an empire comprising the provinces of Summerset Isles, Valenwood and Elsewyr. If you have aspirations to play as a High Elf, Wood Elf or Khajiit, then serve the will of the Dominion.
The last playable faction will be the Ebonheart Pact, an alliance between Skyrim, Morrowind and Black Marsh. Nord, Dark Elves and Argonians will find themselves siding with this faction at the start of the game. This is also the most nonsensical faction of the lot, given that Nords have hated Elves since their first arrival on Tamriel. They’ve also warred with the Dark Elves before and speaking of the Dunmer, they have a long history of raiding the Black Marsh and enslaving Argonians.
The game itself will take place in the second era and if we go by when the first Aldmeri Dominion was founded (2nd Era, 830), then there are a number of other complicating lore issues or retcons at play here. Tiber Septim was born around the same time that the Aldmeri Dominion was formed and as we all know, he went on to unite all of Tamriel and usher in the third era. The more I learn about this, the more I wish it was only a rumour and not fact now.