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I think the most challenging faction is Necropolis, if you play as them. Its 7th-level creature is a disgrace to the entire faction; there's not much good about it. Dark Knights, Liches, and Vampires are decent. As for which faction is the most difficult to develop, I'd say it's Dungeon. The 7th-level creature requires a 4th-level Grand Mage, which consumes a lot of resources. The most optimal faction to play is Conflux. While Pixies are somewhat out of place compared to the other creatures, they are offset by the Phoenix's ability to regenerate after being completely destroyed. That's my opinion, anyway.