In the game you will be able to form alliances. All alliances must have one Leader, but there are two distinct types of alliances: Hierarchical and Democratic. Whenever a Lord starts a new alliance, he must choose what type the alliance will have. Once defined, it can not be changed in the future. If he chooses a Democratic alliance, every member will be awarded one vote to elect the leader, regardless of its land size. The alliance leader, of course, will be the one with the most votes in the previous turn. In case of a tie, the one with the highest population between those tied will be the leader. If the founder chooses a Hierarchical alliance, he will be the leader (long live the King!). He will only cease to be the alliance leader if his Land is totally conquered. If so, the new Leader will be the one with seniority in the alliance, or, in case of a tie, the one with more population among those tied.
Whenever a new member is invited into the alliance, the Leader will be able to set a value in gold to be paid per turn as tribute, or a one time tribute. If the invited Land decides to accept the invitation to join the alliance, he will also be accepting the proposed tribute. This tribute can be different for each member according to what the Leader sees fit. After being initially determined, the value will be fixed, and the Leader may only propose a new tribute value in a subsequent message, that again must be accepted in order for the new tribute value to come into effect.
Once an alliance is created, it will have a forum accessible only to the alliance members. The Leader will have administration powers over this forum.
The alliance will also have a treasury and its own resources. Again it is the Leader’s prerogative to use them as he sees fit, including sending them to any Lands, even his own Land. The Leader is also the only one that can invite new members.
Once created, an Alliance becomes a diplomatic entity in its own right. This means that Lands can have diplomatic relations to an alliance of which they are not members of. It also means that alliances can be members of other alliances, thus creating a chain of alliances/relations between Lands.
Since alliances are diplomatic entities of their own, they can establish relations with Lands. Again, the Alliance Leader is the only one who can propose diplomatic relations between the Alliance and other political entities (being them Lands or other Alliances). If the Land and the alliance it belongs to have different relations with another Land, the Lands relations will have preference over the alliance relation. So a Land can, for example, have a friendship relation with another Land even if the alliance it belongs to is at war with that Land. Another example is the Lands members of the same alliance can downgrade their direct relation to the point of war without quitting the alliance, thus creating a sort of civil war in the alliance!
Each Land can only be a member of one alliance at each point in time. If you want to join a new alliance you will have to first abandon your current alliance by going to Diplomacy => Alliances => Options and selection the option to “quit” the Alliance.