Fate War uses the D&D alignment system. For how that works, you can read here.
Acting according to your alignment will reward your team with mana. Taking actions that contradict your alignment will result in a mana penalty. Also, defeating opponents with opposed alignments will grant extra mana.
While not a requirement, a general rule of thumb is that your Servant’s alignment should be within one “step” of your own, or else your characters will have difficulty earning mana.
Lastly, your alignment also dictates which NPC factions your team might curry favor with. Performing actions of the team’s color will result in favor from the co-aligned team, and disapproval from the opposing faction.