How many factions are there?

Personally, I wouldn't advocate for the creation of a new race—there are quite enough of them already. I couldn't even pick a favorite among the 5... However, a Castle for the renegades is still necessary.
And as for dividing them into "evil" and "good," nothing will come of it, because Necromancers have their own cult, their own life; it's simply a perspective from a different side. And what if angels are more bloodthirsty than hellhounds? Does that mean "good" are allies and "bad" are enemies? It will always be like that!

So now there are already 8 races (7 cities):
humans
renegades (without a city)
wood elves
dark elves
Necromancer
hell creatures
dwarves
mages
+ (potentially) orcs
The balance isn't perfect, but it can be fixed. In general, each race has its own tactic, and there is no point in infinitely increasing the number: one must work on quality. And combining quality and quantity is rarely achieved.

Better fewer, but better! That is the reality of life.