It's not that you need to be in a faction, but you should put some thought into the character you are playing. Where is he from? What is his past? What jobs has he held? Who has he interacted with? How did he get to where he is today? It's not always important that other players know that kind of information, but you should, because those types of things effect what your character would do in a certain situation, and who your character would interact with. I use to have a generic trader, (I now have a IND/Interspace trader) My traders background was that he was from Kusari. Now there was nothing about the ship or name that would let anyone know it was a Kusari, so I could have easily gone trading in Bretonia, but I didnt, because it doesnt make sense. Visual comms or a simple search of my ship would have clearly shown that I was Kusari and I would have been executed or arrested in rp. While there is no way for someone to know that in game, I know it, and my character wouldnt risk his life like that, even though there is no way for someone to know that because of the game mechanics. You should do these types of things not because it's against the rules not to, or because someone says one thing or another. In the end the reason this type of play is good is because it makes the game more immerse, makes it more than just the game, it allows you to really do the things your character would do, and think the way your character would think. It makes the game more fun for you, and more fun for the people you are playing with.