A friend of mine and I were looking at playing some multiplayer games with both of us working as a team, and the question came up about what constituted Friendly Faction.
For example: Circle Orboros has both Secret Dominion and Devourer’s Host. If I am taking a Dev Host army, is he affected by my models abilities when they have the stipulation “Friendly Faction”?
Basically the question can be summed up as is the overarching faction the “Faction” or does each of the theme forces constitute an individual faction?
In Warroom, both Dev Host and Secret Dom both have the tag “Circle Orboros”, which I would take as the defining faction, but wanted to see if there was an official ruling anywhere.
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As far as I know there aren’t any official multiplayer rules for MKIV.
Personally, I would figure out how crazy of a game you all want and then figure it out from there.
Allowing Friendly Faction to splash across players will make it much crazier indeed.
Based on the way armies are grouped together under the familiar faction banners – i.e. Khador contains both Winter Korps and Armored Korps – I think it’s safe to say that “Khador” is the faction, just like “Cygnar”, “Mercenaries”, and so forth. 
I believe this to be correct. Which brings up the interesting point that “friendly army” could be used for wording now, both to allow mercenaries to gain benefit from said rule, and to have an interaction in multiplayer games
Looked through the rulebook again and the only reference I could find was under Building Your Army where it says “Once you have selected your Faction, you must then choose a Leader, generally a Warcaster or Warlock, depending on your Faction, to lead your army.”
I take this to mean that multiple armies (like Secret Dom and Dev Host) are indeed under the umbrella of the Circle Orboros faction and as such, models from each army are considered friendly faction to one another.
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Yeah, that makes sense as the Faction is Circle Orboros.
Both Devourer’s Host and Secret Masters are faction Circle Orboros.