As you progress through Sim Settlements Chapter 3 you will come to a point where you can name your faction and those names are

1.    Badlanders
2.    Bloatflies
3.    Commonwealth Curators
4.    Harvesters
5.    Masons
6.    Minutemen
7.    Practitioners
8.    Rangers
9.    Rovers
10. The Academy
11. The Battalion
12. The Cabal
13. The Syndicate
14. The Union 

So if you want to create a custom faction you may want to use one of these names to correspond with the faction you are playing as in SS2 and you may want to use these names to guide your faction ranks, loadouts, special units, and flags.

Although I might say that the Syndicate has already been done by my Communist and Anarchist pack, and the Union for that matter, as the name of the Anarchist faction is the Anarcho Syndicalist Communes of the Commonwealth O_o.

But, do what you want, its all fine with me.