Legion's a big expansion, lore-wise. While Mists and Warlords dialed things back from the "fate of the world" stakes we had in Wrath and Cataclysm, we're now way back up at about the highest the stakes have ever been. This is essentially the expansion that WoW has been building up to for nearly twelve years, and you could argue even longer, as the entire impetus for the First War was the Legion's desire to use the Horde as a foothold on Azeroth.
Following the Siege of Orgrimmar, Alliance/Horde relations have been a lot better than they were while Garrosh was Warchief. Granted, we really didn't spend much time back on Azeroth during Warlords, but one gets the impression that, with the Draenor invasion a join operation that saw almost no conflict between the factions, things had settled into at worst a Cold War. The Alliance was riding high on a successful defeat of the Horde, while the Horde expunged the toxic Orcish-supremacist faction within to embrace its diversity with the first non-Orcish Warchief.
So what are we looking at as Legion begins?
The Broken Shore event, which will be available in the pre-patch, allows players to participate in an assault upon the Legion's main foothold. It does not go well. The forces are divided, and while the Alliance faces the full brunt of the Legion's advance, the Horde attempts to cover their flank but winds up getting outflanked themselves. So as the Horde finds itself in a dire situation and forced to retreat, the Alliance only sees this as an abandonment right when they need the Horde's support the most.
We don't know the exact details because the cinematics are missing, but the end result is this: Varian Wrynn dies in the battle, and Vol'jin is stabbed with a cursed blade that gives him very limited time before he succumbs as well.
The top leaders of both factions are removed by the events of this battle, and on top of this, a new cause for tension between the factions arises. Let's start with the Horde.
Returned to Orgrimmar, as he sits dying on his throne, Vol'jin calls an emergency meeting of the Horde leadership. Again, there's a missing cutscene, but Vol'jin names Sylvanas as his successor. Now, this might be the worst decision since Thrall named Garrosh as his successor, but there is some logic to it - of the remaining faction leaders, Sylvanas is the senior member of the Horde. Assuming Thrall is going to stay in retirement, Sylvanas has more experience leading the faction than anyone else.
On the other hand, though, Sylvanas is by far the most controversial leader within the Horde, and may have even been able to claim that when Garrosh was Warchief. Of the various sub-factions within the Horde, many have a history of cooperation with the Alliance - the Tauren were friends of the Night Elves until the faction divide came between them. Vol'jin offered his services to the Alliance when the Zandalari turned on us. The Blood Elves were originally members of the Alliance, and though the Dalaran incident has soured things, ultimately the Blood Elves could likely put the Alliance at ease if they were given a leadership position.
The Forsaken, on the other hand, have been highly aggressive in Lordaeron, used indiscriminate tactics like the Blight, raised the Alliance dead to serve within their ranks, had within them for years a faction loyal to the Burning Legion, and then, Sylvanas personally killed the heir to the throne of Gilneas. On top of all that, the Forsaken, more than any other sub-faction within the Horde, has for a long time operated as nearly independent. The Forsaken war machine has kept to its own business, and so a lot of leaders within the Horde probably don't really know what to make of Sylvanas.
Choosing Sylvanas to serve as Warchief sends a message to the Alliance that the Horde is expecting a fight, and they're willing to use any means necessary to win against them.
So how should we evaluate Sylvanas?
There's a question of whether Sylvanas' goals are even good. Sylvanas argues that everything she does is for the preservation of her people. Of course, one could make a solid argument that her people are not meant to last - that the end of the Forsaken and the return of the living to Lordaeron would actually be the best thing for Azeroth. In the interest of protecting her people, she has perpetuated the raising of the dead to replace those Forsaken who fall. Sure, she doesn't seem to intend to turn Azeroth into a planet of only undead, but she wants to keep this undead force going indefinitely.
To be fair, Sylvanas did not choose to invade Gilneas - that was an order from Garrosh - but once inside, nothing was beneath her, including the use of the plague against Gilneas City, even against the express orders of Hellscream. We've seen pretty horrific stuff in her lands, like the Hillsbrad Farm. Sylvanas has never shown any intention of renouncing Scourge-style tactics, tactics that horrify both her enemies and allies.
Perhaps we are being harsh on her, though. Sylvanas believes that her people are fated to an eternity of void after death, thanks to their undead nature. While the living, untainted by the Scourge's necromancy, might enjoy some kind of benign afterlife, the Forsaken have this world and this world alone, and they must cling to it with any methods at their disposal. That's fine, but then the fact that she's condemning the people she conquers to the same fate kind of undermines any sympathy we might have had for her position.
Still, I think there's an opportunity here, especially as she goes to Stormheim to investigate the history of the Val'kyr, for Sylvanas to grow a bit as a person. I'm really curious to see what WoW has in store for Warchief Sylvanas.
Elsewhere in the Horde, there's also an interesting new problem. When Garrosh was defeated, the Orcs didn't really have a specific racial leader, but given that Thrall was still alive, and we also still had Saurfang, the Orcs don't really lack for some important NPC to represent them.
However, with Vol'jin burning on a funeral pyre as Sylvanas makes her oath, the Darkspear have gone from underdog revolutionaries to triumphant leaders of the Horde to... back to just one of the Horde's races, all within the space one and a half expansions. With Vol'jin gone, there really isn't any clear leader for the Darkspears anymore, and I suspect that Troll fans are going to be pretty disappointed that they don't really have anyone to root for or for their stories to revolve around.
Moving on to the Alliance:
With Varian dead, there's an obvious successor in Anduin, who is named King of Stormwind after the battle of the Broken Shore. But is he High King of the Alliance?
Anduin has some major positives and major negatives. On one hand, he is young. Anduin is, I think at this point, supposed to be about 18 - maybe 20. Given that there are leaders in the Alliance who are 10,000, or even 25,000 (and Velen was probably a lot older than that when they left Argus,) no Human was ever going to seem "old enough" to run things. But for a human, Anduin is still pretty young.
On the other hand, Anduin is well-liked by basically everyone in the Alliance. Varian had to earn the respect of the other faction leaders, but they've watched Anduin grow up, and have even helped to shape him into the man he is now. He is brave and kind-hearted - both qualities you want in a leader.
But is he naive? Anduin has a strong belief in the possibility for peace with the Horde, but historically, the Horde has broken peace with massive betrayals - the battle of the Broken Shore being perceived as such (even if that's not actually fair.) Anduin spent a great deal of time with Wrathion in Pandaria, but was unable to predict that the dragon would spring Garrosh after his trial and inadvertently create the situation by which the Legion is currently invading.
Anduin has formed friendships with some of the Horde leadership, like Baine, but will he be able to set aside that friendship if the Alliance and Horde fall once again into open war?
Then there's Genn. Genn Greymane has chilled a bit in his old age, but fundamentally he values his independence, and he still yearns for revenge against Sylvanas, who, as we just described, is now Warchief of the Horde. Not only was Genn's attitude toward the Horde always less than charitable (he advocated exterminating the Orcs following the second war,) but he has also historically balked at the Alliance's attempts to overrule him, cutting his country off from the world rather than going with Terenas' solution to the Orc Problem.
Genn is a man in his 70s, and while that still makes him one of the younger Alliance leaders, I could definitely see a man with such a strong sense of self-reliance be perhaps a bit dismissive toward the orders of a 20-year-old from a kingdom that is theoretically an equal member but always seems to be running things.
So even if the majority of the Alliance and the majority of the Horde want to get along with each other and focus on the Legion, there is definitely a lot of potential for conflict to flare up once again.