Factions. In World of Warcraft, there are tons of factions- more than ten are added with each expansion, and we started off with an (un)healthy 33 of them in just the basic game. Faction grinds are infamously dull and unrewarding, and while it's certainly better to have them than not, they really aren't that well done. Really, saving a race of people from guaranteed extinction should grant you more than the right to buy shit from them. Come on.
What is my solution? Well, I think that politics need to be more a part of it. The idea that a faction only offers you things to buy, even when they nearly worship you (Exalted status) is silly. A faction that really thinks you're the shit should offer you services. Repairs are a necessary gold sink, sure. But how about some other interesting options? Maybe you could (on a cooldown) summon some NPCs from that faction to help you fight. You wouldn't be able to summon them in an instance, so it wouldn't affect game balance, but you would be able to have, say, a few Stormwind knights come to your aid for a hard quest. Maybe you can only summon one faction's aid per cooldown, and can only choose factions that you are exalted with. I think it would be cool if different factions actually had different NPCs- like the Kirin Tor had mages, and the Wyrmrest Accord had dragonkin, and so forth- but just giving them different skins and names would be fine. Only major factions would have this, of course- I can't imagine what Zandalar Tribe would have in the way of NPC aid, for instance. Maybe keep it to the major cities, and major neutral factions.
Other things would be necessary, of course, and that leads us to a special idea of mine. Currently, if one gets Exalted with all of their home cities, they get the Ambassador title. What if it wasn't just a title, though? What if it allowed you to use, on a cooldown, of course, a day's worth of diplomatic immunity? Imagine it- once a week (or month, or something), you could use a cooldown to make it so that you could enter opposite faction cities without getting flagged, and even hang out there. Once the buff it gave you wore off, so you'd have to be careful not to overstay your welcome... but it would be a really cool little way for the non-PvP types to explore the other faction's city. You'd be able to use the other faction's auction house and vendors, perhaps, and maybe even take some minor quests- that's a big maybe, though. Diplomats talk to the enemy, they don't necessarily aid them.
Honestly, as much as this is the World of Warcraft, it's a little silly how it's impossible to use diplomacy or politics at all. It bother me that though you're supposed to be a hero of your faction, besides selling you things and telling you to do jobs for them, the people of your own faction don't seem to give two shits about you. They don't mind watching you run off and get lynched by a pack of gnolls. And though the diplomatic immunity would probably lessen faction tension... adding the summonable NPCs (which could be used for world PvP, of course) would significantly add to it. You thought it was bad when you got jumped by a Tauren five levels stronger than you... well, now he has a patrol of orc warriors with him. Are their potential problems?
Do these ideas need balancing? Well, sure. But politics and loyalties were massively important in the medieval world, and I see no reason why they shouldn't be here.