Yes, you can do both sides.
Basically, you get faction for a side whenever you do things for them (quests, fight in Alliance Battles or at Fort Aspenwood, etc). You can then trade that faction for items (jade/amber, or now entry to the elite missions) or donate it to your guild.
You're considered to be "allied" with whatever group you currently have more faction with. So you could farm a couple million Kurzick faction, trade it all in for amber, go do one quest for the Luxons and be considered a Luxon ally.
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