Basically, this is my vision for this tournament:
Stage 1: group stage - each good guy plays against each bad guy. Choose races from the full list, but no more than 2 repeats. (with 8 games, 2 games for each race + in addition, if there are no more elves left, for example, then they will have to be chosen).

Playoffs - it's clear. The top places among the evil ones go against the last ones among the good ones, and vice versa. Races from the full list - if you made it further, you can no longer play as them.
Semi-finals/finals, it doesn't matter anymore :)