Reminds me off a faction I was thinking about modding in the game. I was inspired by things like the demons in Supernatural (tv series), some movies and other dark fantasy. Still trying to come up with a good name for them, working title is 'Seizers' (Possessors was a bit to straight forward for my taste).
It's a faction that is ruled by people that are possessed by demons/twisted souls. All the normal unpossessed people are enslaved. They gain more souls to posses people with by acts of torture and violence. Their cities are less productive, more likely to revolt. Because they require larger garrisons and special buildings to keep the population in check they would probably focus on a few large cities, with a few feeder towns around them. Certain buildings allow population to be sacrificed to gain more souls.
They have four types of units (so far);
Normal units: Weaker then other factions, low morale, only kept in line by threat of violence or promise of better life. Cannon fodder.
"Possessed": Stronger than normal troops, backbone of army.
"The Willing": Elite troops, created by person who is willingly possessed, becoming more powerful than normal possessed troops.
"The Broken": Possessions gone wrong / torture victims set loose / crazed lab experiments / ... Still thinking of some fun traits to give these.