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can their be more factions than just the starting factions? Like can new ones be made by other characters? And can AI characters inherit a kings title when he dies? (or can he make a civil war?) ALL OF THESE QUESTIONS ARE FOR AI AND NOT FOR PLAYER.
No, and no. The only 'new' faction is made when the player creates his own kingdom.
Kings, or any other NPC, do not die so there is no inheritance in the game.
EDIT: About killing a king and a new NPC taking over the throne: That is possible in Brytenwalda.
If you have -100 relationship with a lord or king you can kill him (provided he's your prisoner).
If the king dies a lord of that realm will take his place.