A System can have multiple jurisdictions.
Deep Space : System-Controlling Faction
Around Stations or Outposts : Faction controlling these (I do believe 1000km Range, which kinda defines the Instance)
On Planets : AFAIK the Faction owning the biggest asset on that Planet rules the entire Planet surface
On Planets with multiple Planetary Assets owned by different Factions : "majority" Faction = most of the Planet; "minor Faction" = around their Planetary Outpost (Range unknown, never specifically tested for that)
Example :
You're hostile with an Anarchy Faction inside a System (let's say from intensive Bounty Hunting). That anarchy Faction only controls an Outpost in space and a Planetary Asset.
The System-controlling Faction is a Democracy and you happen to be Wanted with them over a Traffic fine
Let's say you carry a prohibited Commodity the Controlling Faction doesn't like and you're Wanted with them anyway.
- you enter the System : "Illicit Cargo" displayed, jurisdiction is that Democracy, "Wanted" displayed
- you disengage at their Station : same...
- you fly onto any Planet that doesn't have any Assets on them : same...
- you Disengage at the Station of let's say a Corporation Faction that's also in the System : "Illicit Cargo" remains, but no "Wanted" ... you're not Wanted to them, a Patrol Fighter will scan you but nothing will come of it apart from fining you for the Illicit Cargo... your other Wanted Status is not their business
- you Disengage at the Anarchy Faction's Outpost : nothing displayed... they don't mind your Cargo and there's no such thing as "Wanted" in an Anarchy jurisdiction. Can't land there though, and it'll attack you when approaching. You're Hostile to them.
- you fly onto a Planet where the Anarchy Faction has an asset : same as above... you're in their territory now... However, any Skimmer from their Faction you'll see will be a) Red and b) attack you instantly.. you're Hostile with them
