Why not give the Fallen weapons +1 to attack more than the Kingdom weapons.  For example,

Fang dagger = 6 attack instead of 5

Blood axe = 8 attack

Boar spear = 10 attack

The Kingdom players will say that's not fair so give each Kingdom faction a way to make +1 defensive items as follows.  Each Kingdom faction will specialize in making 1 armor type giving it a +1 bonus to defense.  For example,

Altar specializes in helms so Altar padded helm = 2 def, Altar leather helm = 3 def and so on

Capitar gets +1 cuirass

Gilden gets +1 shields

Pariden gets +1 armlets

Tarth gets +1 greaves

This would be a simple way to add a little more variety and uniqueness to weapons and armors not to mention more distinction between factions and races that we've been asking for.