In my opinion, there are two paths regarding the number of factions... let's look at some examples...

First: Games like Age of Wonders, with 12 factions in the first part, then 16+. The balance is non-existent, but people play because of the variety, the partial uniqueness of each faction, and so on. Currently, the game is dead and only a few fans remember it...

Second: The game Starcraft - THREE factions. The balance is almost perfect, and the factions are ABSOLUTELY different. It participates in all esports competitions in the world. In Korea, it has become a religion. After NINE years since its release, it remains the BEST strategy game.

Personally, for me, balance and uniqueness are better than many pseudo-different factions.