I feel like we'll see ranks start to swell up again in a matter of weeks. With summer break coming up, it wont be just elementary kids getting out. Plenty of High School and College guys have a whole summer vacation as well. It's usually the case with games that are experiencing a lull in the fanbase; Once school's out, stuff starts happening.
In terms of faction size: Everyone wants to be big. Only certain people with good reasons actually want to stay small. Not everyone can be big, though, because more often than not, new small factions have such a pitifully poor and tiny main post it doesn't attract new members so much as it attracts "Aww that's cute"s. Personally i spent a few hours planning out the Adenian Empire's thread and even still it isn't the absolute best.
The basis is, Better factions get bigger. Piss-poor factions stay at that sad little 1 member count. But that's good. If we had piss-poor factions in the 30+ member count area, well... it'd be piss-poor.
I also agree with GrandMoffTarkin, Leanson, and Karnage. The bigger factions keep the smaller (and equal-sized) factions in check. However, some smaller factions can be a big enough threat that THEY keep the bigger factions in line, for various reasons. It's a great big balance game in terms of power. You've got the overlords, the underlings, and the peasants. All three capable in some way of overthrowing the others, and often do.
If you WANT to get bigger, get your hind over on TRA's main server. The place has a decent amount of people on at all times, and get social. I do suggest not just inviting everyone left and right. As much as you wanna be a big faction, people who you invite on a whim tend to... leave on a whim. With all your stuff. The more of a friend you are with your new members, the likelihood of them staying skyrockets. The same goes for people who have friends already in the faction. Encourage your existing members to invite their friends to apply to join.
A really good way to judge maturity and trustworthiness is something i'm going to try doing some time.
Before having them join the faction, bring them on to a Teamspeak channel and have them talk to you, a voice interview. Also, people who want to join just to defac everything dont want to go through a long process. Unless they're really determined to steal something.
One thing that would really help is for faction permissions and rank to actually have a use with the Permissions Module.
I'm looking at you, Schine.