XML is generally quite well-defined.  If you take a look at the entries for core weapons, races and so on it isn't too difficult to see what you need to do.  You can add new stuff in a modular fashion, meaning you don't have to add one item to the original file and drop it into the mods folder, you can just do the one or two items and see if they work.

You can also further customise your custom factions just by lifting tags from the existing raceconfig and adding them to yours.

For example, <Capital>Namegoeshere</Capital> will set the name of the first city that you found.