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On the races page there are three factions that the races are split up into: http://www.vanguardthegame.com/races.vm
If a friend of mine creates a Dark Elf in Qalia and I create a Raki in Kojan can we still group together, do the same quests etc etc or is it restricted by faction like Horde and Alliance in WoW or Order and Chaos in Warhammer?
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Everyone can group with everyone, it would just cost your friend or yourself a small fee to teleport to one another and quest together.