Is it possible to build towns or create factions on other planets such as Gallifrey? I’m sort of a new player, and i’m thinking of starting my own town/faction. Also, are factions for RP use only?

yep, you could make factions/towns in every dimension. Nope, it is not only for RP use, you could create any faction, like one for protecting people on the server or just literally a chicken faction (it exists lol)