There is no official way to change the faction names.
You can, however, open one of the xml files for the game in Notepad, or other text editor, and change 'The Zealots', 'The Imperials', 'The Hordes' and 'The Warlords' to something else, though. Make a backup of the file before editing, just in case (this is unofficial and unsupported). I checked that this was the file to edit to have the faction names change in a multiplayer lobby and campaign map, but have not otherwise tested this.
..\Dragon Commander\Data\Localization\English\english.xml
