May I add another few suggestions to this great suggestion?
Firstly, closely related to the OP: many systems have multiple minor factions. It would be good to display all these factions as they appear in the galaxy and system maps in terms of which stations they control, which superpower they are affiliated with if at all, and their proportion of control overall in the system, the latter perhaps as a pie chart, colour coded according to the player's reputation with them. It can even have an overlay displaying their current political status, be it civil war, famine, etc. so that trade and combat can be planned from afar. The "political forecast" overlay, as it were, would only appear at a certain light year radius for ease of calculation, although if that is unreasonable, then it could be shown everywhere if feasible.
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Secondly, and somewhat related to this, is this problem I have right now. I'm now Allied to the Empire, and as a result, ALL minor factions affiliated to the Empire show up as Allied. However, there is no indication of which minor factions are truly Allied due to my doing good deeds for them (trade, bounty hunting, exploration sales, missions, etc.) and which ones are merely following the superpower whip as a result of the overall attitudes of the former group, i.e. Which ones will revert back to Friendly when superpower reputation decay kicks in, and which ones remain Allied as intended.
For this, I suggest changing the terminology for superpower rep, and make it more of a "superpower mood," emphasising and distinguishing the current and fluid nature of superpower rep versus the fixed nature of minor faction rep. Superpower rep can therefore vary between "Hated, Disliked, Indifferent, Liked," and "Adored" instead of Hostile, Unfriendly, Neutral, Friendly and Allied.
In a way, it would also dispel the misconception that one can be Allied to the entire Empire by performing a few errands for half a dozen local systems only: more realistically, a large part of the Empire can "adore" you instead. This also changes one's attitude to rep decay: you don't lose an alliance, you lose an attitude.
Minor factions following the party line will have their rep show up as the same as the superpower mood, while those minor factions who were directly affected by your actions will retain the old rep rankings. Yet even though the terminology is different, the equivalent levels have the exact same effects.
Minor factions obeying the superpower attitude of course can be overridden in the usual way by your actions if your minor faction rep value surpases the superpower mood equivalent, and as per rep decay, this will remain fixed until actively acted upon by you. Thus, when the tide of superpower rep or mood is still in, you can still tell which minor factions don't know you personally and whose reps you can improve by yourself.
For example:
I am Allied to three minor factions in the Federation and Friendly to four. At some point, my Federation mood rises from Indifferent to Liked. All Neutral federal factions now become Liked, while Friendly and Allied factions remain as such, the Friendly factions having the same degree of status as the Liked.
Some time later, two Friendly factions becomes Allied, and two Liked (usually neutral) factions become Friendly. Federal mood rises to Adored. Now, all otherwise Neutral and Friendly minor factions in the Federation switch to Adored, while Allied factions remain Allied. Despite tje name differences, all minor factions have the same degree of status.
Much later, I leave Federation space and do non Power work in the independent worlds for three weeks. Due to my absence, Federal mood drops to Liked. All Allied Federal factions remain Allied, while factions whom due to my interactions would have been Friendly, revert from Adored to Friendly, thus dropping in status. Federal factions who would normally have been Neutral fall from Adored to Liked, but have the same degree of status as the Friendly factions.
If this can be incorporated into the OP's Galactic Map reputation overlays, it can generate a very accurate heat map of a player's reputation among all superpowers and minor factions, which will have implications for the complex relationships with Powers.