I've always worked on the basis that the maximum number of factions that could be present in a system was 7. However, there are some systems with 8 or more factions present.
If the 8th faction is forced to retreat from a system, does it then create a vacancy into which a new faction can expand? Or are there just systems with too many factions in them, and each retreat lessens the extent of the over-population?
Systems with 8 or more factions in cannot be further expanded into at all under current BGS rules. They must be reduced to 7 through Retreats before any further faction can arrive.
Systems with exactly 7 factions present can be expanded into only as an "invasion" expansion. To be eligible to expand by invasion, a faction must:
- already be present in every system in range with under 7 factions (i.e. have filled up its "normal" expansion targets)
- have a system in range which it is not present in with exactly 7 factions
- have at least one non-native faction in that system not already involved in a conflict
If multiple systems and factions meet these criteria, the eligible non-native faction with the lowest influence when the expansion takes place will be chosen as the target (not, as it used to be until about a year ago, the closest)
In an invasion, the expanding faction fights another non-native faction (by War or Election, as appropriate for their respective ethoses) for the 7th place in the system. The system temporarily is at 8 factions, but the loser of the conflict (if it's a draw, the invader is deemed to have lost) will retreat a day after it ends, returning it to 7 factions again and making it a potential target for a future invasion.
Because of the requirements, these generally only occur in relatively sparse areas, or where a faction has consistently expanded from the same system for a very long time - it is possible for factions to become extremely large and never run into this scenario.
An invasion does not permanently leave a system with 8 factions - any system with a stable 8 (or more) factions gained this number under a previous version of the expansion rules, and will not be able to return to having 8 or more if any do Retreat. It may be in your interests, if already present in one of these systems, to ensure that no retreats occur and therefore you are strongly protected against invasions.