From Naevwiki

A "faction" in Naev is a political or economical entity that may or may not own such things as ships, stations and planets. We distinguish the following faction types:

• Major faction

A major faction is a canonically established faction. Typically, major factions will own unique ships as well as multiple stations and planets. Major factions will appear in the game as per the presence system. The player will have a reputation ranking with all major factions, which can be viewed in the status panel. The player may also choose to join major factions, and follow a central storyline for that faction to its completion, upon which the game is considered complete (and will thereafter proceed as a sandbox).

• Minor faction

A minor faction, though canonical, typically does not own unique ships or many stations or planets. Minor factions will appear in the game as per the presence system. The player will have a reputation ranking with all minor factions, which can be viewed in the status panel. Minor factions may offer missions to the player, but the player can never become a member of these factions. A minor faction does not have a large storyline campaign.

• Pseudo faction

A pseudo faction is a non-canonical faction used for convenience by mission scripters. Pseudo factions do not appear in the status screen, do not use the presence system, and as such typically do not make an appearance outside the context of the mission.