Gameplay
A player is able to join certain organizations (especially guilds and houses) giving them certain benefits. In Elder Scrolls IV: Oblivion, there were five joinable guilds- the Fighters' Guild, the Mages' Guild, the Thieves' Guild, the Dark Brotherhood and the Arena. There was also one "secret" joinable guild- the Blades. There was also a conscious choice from the designers to not allow the player to join certain guilds, including the Imperial Legion, due to the different roles that the organizations play in Cyrodiil to what they did in Vvardenfell, where Elder Scrolls III: Morrowind was set.
Once a member of a guild, a player is set quests by NPC guild members. The quest typically has an objective fitting the nature of the guild and the player is left to decide how to complete it themselves. For instance, in Morrowind, there are numerous Thieves' Guilds quests revolving around stealing specific items, and in Oblivion, a Dark Brotherhood quest involves the player being invited to a mock party at which he is tasked to kill every other attendee. Todd Howard said that "there are so many ways to do that quest and it isn't a 'run through a dungeon with armour' kind of quest", saying that it was one of his favorite in the game. In Morrowind, a guild would typically have numerous NPCs with quests per guild, totaling somewhere between twenty and thirty quests per guild. Guild quests are separate from the game's main story, and so though the main plot may feature the factions, a player does not need to work their way through them. As such, the player can choose to ignore the main plot or the factions as they please.
Benefits of guild membership includes the ability to rise in ranks through the organization, until the player becomes the head of the faction. In Elder Scrolls III: Morrowind, being a high rank changed little apart from the way that other guild members addressed the player, while in Elder Scrolls IV: Oblivion certain services are not available to players until they are high up in the guild- for instance, enchanting is not available to players unless they are of a certain rank in the Mages' Guild.
Guild relationships in Daggerfall were minimal, and so, despite in-game rumors of organizations being at war, there were no gameplay elements influenced by this in the final version of the game, despite the fact there had been plans to have some. In Morrowind, joining a guild would result in members liking you more, leading to cheaper goods and services. This also worked in reverse, with members of opposed guilds liking you less. Oblivion took this further, introducing a Radiant AI system, allowing NPCs to have their own goals and motivations. Though this did not work on a wider scale to create goals for entire guilds, NPCs were automatically friendly to other NPC guild members.
Read more about this topic: Organizations Of The Elder Scrolls