I say make a towny where you can declare war on other towns. Not exactly factions, but still allow diplomacy. I.e. A Declaration must be for valid reasons to avoid griefing. For example, a town has built land too close too your town and is in the way. A member of their town has attacked a member of yours in some way or form. "proof must be given". National Rivalry, Competition etc. I.e.
"Imperfectly's Nation has been stealing towns and residents from Jalapeno's Nation and Jalapeno feels he must go to war for said transgressions."
However a declaration must be done with at least a weeks notice.
Remove certain things like /fly /smelt and /heal in this particular towny world and make it a true towny/nation situation that allows diplomacy, alliances, rivalries between towns. This my friends can take the server to a new level and revolutionize things. Do something creative with towny. Lest it just turn into a clone of Alpha and Beta. I wouldnt want Ceta to turn into another boring "build it high with lots of grinders" nation.