So you have to choose a faction ? But also your actions are couting in ?
(for me choose a faction means you cant get back, once you have choose, its over x) )
Maybe a "Action-Consequence" system is better, like in GTA2
You begin neutral, but as attacking a faction,you gain respect from its enemy for killing its member & more respect you got & more advantage you got (in GTA2, factions members helps you to fight police when they after you) but if you decide to switch faction, you only need to attack the faction's troups you were in. (guess you were thinking a system like this) but you never decide to "choose directly/permanently" your faction.
Im not really a fan of factions conquering planets, except if you talking about PvP for "RP" issue but not the factions AI troops doing it, of course AI troops can be deployed to defend a conquered planet.
Of courses, miners/traders/neutral can have some Navy/Pirates escorts/defense troops in add/or to "say" they more Navy or Pirates.
In neutral territories, i think a anti-attack warning should be displayed, attacking a player (no side couting) or a facility would lead to a reaction of defense troops to destroy the agressor.
These are just ideas, not sure if they can put easily in the game ><