Thank you Lord Xia! I hope you get those ponies you always wanted. What files do I go into?

No that is way way way more work then you need to do. Creating a custom race is a lot of work. You have to go into tons of files and add tags that allow the new race to use every individual piece of armor, animations, hair, clothes, cloaks, etc. You can see an example here.

Instead to change the skin color of a faction you can simply:

1.Create your custom faction in the ingame editor. Close the game

2. Go to C:\Users\User\Documents\My Games\FallenEnchantress\Race or whatever. Your custom faction will be there.

3. Open the file in notepad. In it will be the tag <UnitSkinColor>165,165,170,255</UnitSkinColor>. The last number is always 255. The first three numbers change your skin color. If you have no idea what numbers to use go to the sovereign design screen and mess around with his skin color ,  either remember a good color or save the sovereign and open it's xml file in the units subfolder and copy his skin color  into the faction tag while keeping the last number 255.

Um... you only have to do that if you're actually trying to change the Unit Models. You can reuse the same model in your units, and never have to redefine the item compatibility. All those compatibility checks the unit model, not the actual unit/race type (the reason altar's henchmens are bugged is because they used a new model for henchmens - HenchmanMale instead of just KingdomMale - They did this to link the the special spell/henchmen traits to those models).

The reason you'd want a race type is that you can then redefine the base units, and thus change the blood bonuses as well as define any special units (this is why altar's henchmen don't show up for non-altarian heroic races). You can definitely change the skin color in the faction file alone, but you'd have to use an existing race and take everything they have to offer.

Quoting FatNonFree,

reply 5

I tried what you said Ds they are still grey .  Do I have to start the game again?

You always have to restart after a mod. You'll also need to make a new game with that faction too.

Oh it's definitely easier to change skin color with the faction file alone, that's for certain... but it's also not particularly "hard" to do a search and copy and paste some units and changing their names a bit either. Although if you're fully redefining everything, it does end up taking a bit of work. I only said it because he seems to want a different race (orcs)...