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In GW none of the Factions were fighting just to fight. They all had some motive for fighting, and since it has been awhile since I've seen the series, I can't be sure if it was for some control over Earth and/or Space. So, lets talk in general Gundam plot. It's always Earth vs. Colonies, and usually the factions or nations fighting (whichever it might be) have control over some area.
Now unless the person is rich there has to be some way to "fund" their war. I'm not suggesting we bring back the government system. As much as taxes brought realism to the situation, I could never figure it out, so I just avoided the situation all together when I was leading L3. What I am saying is there has to be some kind of explination for the faction's existance, and unless it's just one person with a bunch of mobile dolls, then he or she has to have people, and people come from nations. Unless the factions that are fighting are being "funded" (again, I don't mean that the actual groups are given credits all the time from whatever Governmen they are under) by their main Governments, there has to be a reason for their rise to power. That's usually because a person has ambition to rule, or some other evil reason.
If we are to throw out the governments, we basicly need to start all over. Jyotika's plot in Asia's affairs have made drastic changes to the story, which I have fully welcomed. I believe we should just consider Jyotika and his government as a faction that took over Asia, and occupied the Sanc Kingdom. A major problem we have is that neither of the main leaders of Earth and the Colonies are participating because of their own personal reasons. With out them, however, to have a Gundam story you have to have conflict. Thus, we have characters like Jyotika and Odin from Earth, and I created the character Raphael Winson to have someone evil in the Colonies, since I don't believe either side should be just good and evil. Which, if anyone's annoyed by that, I'll find a way to get rid of him.
So, if we want everything to be about Factions, we need someone who will deal with the matters of Government for both Earth and the Colonies, otherwise it's nothing but senseless violence or constant personal grudges stories, and those get old fast. I believe there has to be reason for the actions that go on in the RP, if no one agrees, then I'll just shut up.