@hawkeyefan, thanks for that post. How did you go about (if at all) establishing connections/dispositions between the 30-odd factions that were collectively created, and the NPC villain that you had created? Is that a GM decision, or do you have to hand the players some "ownership" of your NPC?
For the faction relations, some of them were pretty obviously positioned to be enemies, and others were obvious allies. We leaned on those apparent dynamics, and left a lot of the more in depth relations to determine in play.
The "main villain" is the organization that created the barrier that encloses the nation, called Eclipse. Their actions kind of serve as a kicker to the campaign. After that, they're kind of present in that they have overthrown the dictator and seized his palace, and are kind of slowly taking territory throughout the islands. In that sense, I don't think that the players have much ownership over that NPC organization.
Others, however, I'd say that is more the case. I ask questions of the players to fill in gaps about what we know of a given organization or NPC, and to establish some of those connections. I think in a lot of cases, we've drawn heavily from super hero comic tropes and ideas, and so there are some baked in details or implications.
For example, one of the other main factions, and the most direct opposition to Eclipse, is The Brainstorm, which is an enclave of super scientists and engineers very much like Marvel's A.I.M., but without the beekeeper suits. One of the players said "This island sounds like a place A.I.M. would hang out" and that's how that came about. We decided that they were the true power behind the throne of the dictator, so to speak, and so they have the most to lose from this invasion of their territory.
So that makes it easier to kind of see where all these pieces fit. Kind of like your comment about
@Ovinomancer 's use of mind flayers; certain ideas just leap out based on the tropes and the inspirations we're drawing from. A lot of this is collaboration, or me as GM building on what we've set up together, or what a player has suggested.
For the personal rivals, I'd say there is even more ownership by the players. I essentially leave the details about those NPCs up to the player to decide, and the nature of their relationship. I play the NPC in any actual interactions, but those are generally framed by what the player has established.