Morrowind did factions the best. IIRC, there were at least 4 factions you could join depending on your particular playstyle.
Rogue character?
You had Thieves Guild, House Hlaalu, Morag Tong, and the Berne Vampire faction.
Warrior character?
Fighter's Guild, House Redoran, Imperial Legion, and Quarra Vampire faction.
Spellcaster?
Mage's Guild, House Telvanni, Tribunal Temple, Imperial Cult, and Aundae Vampire faction.
Each faction had their own quest line, and often interacted with the other factions in said quests. IIRC, a large part of the Thieves Guild quest line was stealing from the Mage's Guild and wiping out the Fighter's Guild (or was it vise versa?)
Not only that, but they were very specific about joining requirements and advancement within the guild. If you didn't have the right attributes, you couldn't join and/or advance in a particular guild. Unlike in Skyrim, where I can be the head of the College of Winterhold by knowing only one spell (literally).