Why only two? Most of the best and most beloved gaming settings have something in the area of 4 to 10.
Legend of the Five Rings
Iron Kingdoms
Game of Thrones
Magic the Gathering
Everything ever published by White Wolf
Ect.

People are instinctively drawn to tribalism. The more varied the factions, the more likely someone out there will identify with one, and through it, get sucked into your game.