HeroChat lets you have chat channels and local chat distance fading (after certain distance, people can't here you), MyWarp allows for warpsigns, BorderControl Lite allows you to limit how much of the world people can go to (to avoid people going pointlessly far from the center and stuff) and Essentials allows you to set per-group spawn points. Everything would use Permissions to hold together. The only thing would be that you would need someone to manually assign someone to a certain team when they pick one to force the change. All of these require Bukkit.

Or have someone moderating the battles, i.e if a town is empty it would be illegal to attack.
Punishment could be, getting teleported far away, having your town recieve equal or greater damage, warn the player (3 warnings then ban?) one of those or find a mod that fits your needs, may be one out there somewhere...

Oh yeah a big bedrock box in the sky or underground with sign warps to a faction. Each faction would need private chat or you could easily sabotage the enemy. This would take a lot of mods to work. And if one faction has nobody online it could easily be killed. Maybe just 2 set factions and it's like last man standing or something. idk this will take a lot of work.

you could just have a huge box in the sky that you spawn in and you choose what side you want to be on. then TP to that side and change spawn

Um is this a server? Do you ave the server set up yet? I was thinking something similar to this, but it might not work out if someone captures the spawn. It would need some faction mod system.