Factions
Depending on who a body asks, he'll be told that the factions are the lifeblood of the planes - or the worst plague that's ever befallen them. 'Course, it's not like anyone can remember a time when there were no factions. Most of the groups that exist today are just a thousand years old or younger, but other factions were around before that time as well. The bands weren't always so organized, either, and there used to be a good deal more of them - four dozen or so, all bickering and brawling. It was the Lady of Pain herself who eventually forced the factions to limit their number to 15, in an event called the Great Upheaval that took place over 600 years ago.
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Sects
On planes where the factions don't hold as much sway as they do in Sigil, other organized groups with wide-reaching philosophies take their place. These groups are called sects. Some are former factions that fell in importance or membership (perhaps because of the Great Upheaval). Others are just groups that espouse the ideas unique or limited to a particular plane or realm.
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