My experience with "user created factions" is that balance just goes down the drain. Everyone ends up playing pretty much identicle builds based on the mainstream cookie cutter strategies, and the feature ends up counting for nothing. Another issue I have with such a system is that it's very taxing on the developers, and can take away from other aspects of the game.
As for custom heraldry, that's another matter, one which has its own thread.
Frankly, I think Dawn of Fantasy is a great name, and (sorry to be woefully blunt) but your suggestions just suck. I don't think I would ever buy a game called "Dragons and Warring Nations".
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