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As I noticed, in Heroes of Might and Magic III, factions are divided according to the type of terrain, i.e., there is a fire castle (Inferno), water and swamp (Haven, Swamp), desert (Bastion, Stronghold (stone desert)), and so on. Therefore, new factions can be added based on the type of terrain; the main thing is that they fit into the game.
P.S.: I haven't played Age of Wonders, but a chariot is a mythical creature, as I remember from Jewish mythology. I think it lacks Conflux and Egypt.