Dynamic History in Games

I have a friend who is currently on an MMO run, jumping from one to the next, looking for the next Everquest (his personal favorite from the sounds of it).  Personally, I have only played two MMOs, World of Warcraft (thanks to a 7 day trial combined with a Christmas week off) and Star Wars the Old Republic (because it's Bioware and Star Wars).  Posting my thoughts on those games are two whole other posts, but the reason I bring it up is because there was one experience I had early on in my WoW time that I think should be built off of that only MMOs really have a chance of achieving.

For those who don't know World of Warcraft, players play for one of two factions, The Alliance or the Horde.  On a Player vs. Environment (PvE) server like I prefer, this really doesn't show itself in any way since players can't randomly attack each other.  However, if you attack an NPC from the opposing faction, you are open to be attacked.  Early on, players would organize raids on the enemy towns to try to wipe out all the NPCs.  The alarm was usually raised fairly quickly and a defending force of players would be rallied to defend the low level players trying to quest through the area.  There is no real benefit to this for the attacking players other than for funsies messing with the other team, but I think there should be.

One thing MMOs have going for them is the ability to emulate massive scale wars that players can take a part in.  This only really works if there is any lasting effect of the war.  So if attacking an enemy town will either wipe it out or take it over (thus increasing the size of your empire), the game can start to build a history.  If you take this a step further and allow factions to be completely destroyed and new ones made, you can completely emulate the rise and fall of great empires.  Obviously, this would have to be regulated in some way or another (for example, what happens if you were offline when your empire fell?  Is your character from that empire able to start a rebellion of some sort or is it converted to the conquering empire?).  Due to the persistence of MMOs, the NPCs would have to get involved in some way so that players can actually maintain lives outside of the MMO without worrying about their faction being lost while they were gone.

Adding in systems that allow a dynamic history like this would give a game the ability to have events with the impact of the The Cataclysm of WoW without having to spend developer time to manufacture it and let the game manufacture the massive events themselves.  It also gives players a wonderful reason to work together on a global scale that makes the world feel even more massive than it already is.