Have been looking at the custom creating of factions, and thought I would put a few minutes into some input...
So I went in and looked for the obvious flaws.
Also looked a bit around in sovereign creation, and decided to add that here.

Creating Custom Faction:

1,1 Empire and Kingdom Symbols:
The small symbols showing the factions banner, and while a nice feature, could use some improvement for the sake of... not taking too long and being too difficult. These are the symbols I am talking about:

Right now locating the "proper" faction symbol takes a trillion clicks, so I would suggest a slightly better editor, where you could pick:
Background color
Background pattern
Faction symbol
since finding the right symbol would take less time in this way than locating the "right" symbol after scrolling through 10 banners with crowns, 8 banners with tree's, 5 banners with hammers, 2 banners with swords, etc.

1,2: Map colour choice in factions:
There is a supposed option to change the "Map Color" for a newly created faction, but no obvious use for this button, whenever I try to change it, nothing happens at all, so what is the point of this button.?

1,3 Sometimes you cannot see the difference when picking Faction Colors:
As you can see below, I picked a lot of yellow, but the figure to the right shows no such things, if he does not change due to your choices what is the point of him being there at all?.


1,4 Faction Weaknesses:
Why can you pick up to 3  faction penalties when creating a faction? Shouldn't there be a limit like when creating a faction sovereign? So you don't go nuts. Like the picture below...

Also when starting the game, you cannot see all your choices on the starting book, making it rather pointless for it to show your abilities.

1,5 Picking Mutual Picks:
You can pick mutual Picks that should be mutually exclusive, but are not. Options include but are not limited to:
  No archers penalty + Upgraded archers.
  Light Plate + Masterwork Chainmail-
  Uneducated + Scholars.
I think there should be some limit, especially to help newer players, especially with stuff like "No Archers Penalty" and the upgrade for bows, which will (I tried) Just waste the trait that upgrade your bows.

1,6 When creating a faction, choosing races are uninformative:
When you are creating a faction, it would be really nice to see the benefits from picking each race, instead of having to either guess, or go out to the faction choosing screen to see the other faction's Bloodline abilities, which doesn't even show all the benefits.
You have no idea that you will get the slaves benefits from Magnar, or the Golem Benefits of the Ironeers.

So it would also be nice to somewhere see that when picking magnar, he gets a certain slave bonus, except the slave lord trait. (If you decide these bonuses SHOULD be tied to races, which seem kind of Random, Really!

Creating Custom Sovereigns:

2,1 Choosing a faction for your sovereign:
This step is rather similar to picking a race for factions, when I am looking through the pre-made factions for my Sovereign, there is no information on what they do, so I am again clueless and am to guess what they're abilities are out from they're name alone, So I suggest you put it down as an additional tab for the hero, like you have a tab for appearance, and a tab for writing background, Also make the hero start on this tab, and try to make the player focus on that section first, since changing faction resets the current choices (That could be remedied too!)

2,2 When I have created a sovereign, I cannot edit him:
I really want to be able to edit sovereigns I allready created, sometimes I have made 1 tiny mistake and have to redo the whole sovereign, it would also be nice if I was able to edit factions I made allready, (don't have to be able to change from empire to kingdom, or reverse, just the abilities and background)

2,3 The description for Diplomat Profession:
The full description for "Diplomat" Cannot be shown for some reason, while the full description on the "Scarred" can. I will show you an example:

As you can see, Scarred knows how to create a second line to type in the penalty.

I could go on about some of the balance in creating a sovereign, but I will save that for another post...

Sincerely
~ Kongdej