Your idea is a good one. & it is currently being used by I know of at least 3 factions in a sense ( might not be exact, but same basis)
Few recommendations for you...
When you choose what NPC affiliation you wish to be, Study the role play. There are all kinds of stories, Bio's & the Disco GC Wiki is a seriously valuable tool to gather information to assist you in your role play. Might also PM leaders of other faction with the same ID affiliation for advice, their role play & such.
Also, I suggest if you wish to form a faction & not be as restricted to others current role play, Choose one of the several NPC factions that are currently not being played by other groups. This not only gives you a wider range of what you might be able to do role play wise. But also the freedom to make new role play for that group & the chance to involve more of the community into role playing with something completely new.