People always claim that we all think of ourselves as 'the good guys', no one likes to think of themselves as evil, but the reality is much of the worst evils that have happened in this world came from people thinking they're superior and the people they're colonizing are inferior; good and evil didn't come into it, because no rational person commits the horrific acts that colonizers have without thinking of it as evil. I recall reading a quote from a British journal from someone involved in colonial India who said he felt the slaughter of all the men in this one village (it was retribution against Indian freedom fighters) was a waste; he said he didn't feel sorry for them and he didn't like them, just that the killing was a waste, which read to me of someone who could clearly tell what they were doing was evil but that he still believed they were superior and the people of India were inferior.

A better alignment system would instead look at cultures that think of themselves as superior and others as inferior, similar to libs and chuds who defend atrocities against non-Western countries as 'our way of life is better', but then inevitably if the game starts to look more like real life history the players would find themselves on the evil side. If you played a game that started you off in 1800's Britain (for a similar Western-centric setting similar to Middle Earth's Western Europe styled setting), your side would definitively be the bad guys and you'd have to commit the 'great evil' of turning on your Western culture (if you actually wanted to be the good guys). There were many people who 'went native' to join the communities they were supposed to be eradicating or helping in eradicating.