Factions represent think tanks, political and ideological parties, departmental bodies and quangos, secret societies and other such groups comprising of the elite members of a Civilization. Each Civilization will have their own set of four Factions.
Functionally, Leaders can be assigned to a Faction to give the civilization a boost to a particular aspect of their production or output, usually (but not always) at the expense of a proportionally smaller penalty in another field, to represent the trade-off made when a Faction operates to push a civilization in a certain direction.
To assign a Leader to a Faction, simply drag and drop them from the Unassigned Leaders pool over to the Faction slot. Once a Leader is added to a faction they can be easily removed without having to use the Fire or Execute commands.
Design note: the Factions system replaces the â€œeconomy slidersâ€ of previous Galactic Civilizationâ€™s games, which tended to encourage the kind of turn-by-turn tweaking and micromanagement of a system that was really intended to be set and left by the player for larger periods of time. Players are still free to regularly add and remove Leaders from Factions in this way if they wish, but there is rarely any need to do so in GalCiv IV as the rest of the game has been designed to remove the need for micromanagement in general.