I'd love to know how you plan on having the two factions interact eventually, having them more or less cut off from one another.

You could use NPC clashes as methods for characters to defect from one side to the other (aka 'Jones signed up for a battle that happened in the background and pretended to be a soldier from the other side once his side was nearly wiped out'.)

I don't know if having actual in game clashes would be wise, unless all parties participating are well aware of the consequences of being taken prisoner and brought back though, you know?