I'd like to start off by saying the balance of PVP and RP was one of the major reasons why I enjoyed the server. Since the bar fell more towards slice of life rather than playing your role made it very dull. Playing a role since the start was one of the major foundations of the server so it's not like that will ever change. Most people who actually complain about getting raided and causing a role-play to be ruined also have all the liberty to take their role-play elsewhere to avoid it and let the guard respond.
Villainy has always been a very broad definition for conflicting interests. There are some nations with cultures that are darker in worship than others, yet stand as a main race. Usually the offender is always stuck as the 'villain', but the conflict of interest is the cause. A Human army raiding an Elf city would cause the Humans to be considered attacking villains even if they were doing it to provide for their own people.
Minor Villainy would fall around things such as raids and such, but there is always a means to an action. A /true/ villain would be those that cause grief beyond measure. This would be an example of the Undead, who attempt to cause complete ruin yet have no place on the server as a community anymore.
Most communities are often formed as cliques but I have always seen banditry as a smaller group of friends taking up a small role rather than taking up power as a Lord. As for raiding, when I first joined the server during Vailor the appeal of a raid was similar to that of a Guild Monster Hunt. Instead though, it was a PvP clash between cities and very popular activity that allowed people to rally through Skype. The moment a ping was sent into chat about an incoming battle would cause almost everyone to hop online immediately to defend. It wasn't seen as something majorly important but rather as a rallying activity, because the only thing gained through victory are items and most of the time they weren't moderated because groups could dynamically rally and fight it out on their own.
One of my main issues with the raid rules currently is that peacetime raids are discouraged greatly allowing merely a family of 5 as a max cap. Yet regardless of a win or a loss for the 5 man peacetime raiding party allows the defending city to be on cooldown for 2.5 days (12 hours per player) or nearly half a week. The cooldown gives the city a few days to recover, but is intended to suppress any further raiding even though realistically you could do the server vote for a single day and obtain nearly a full set of armor back through the Auction House. War Raids are almost just as a bad because instead of being a minor raid where loot is simply the outcome, instead they added a way to encroach upon enemy territory by establishing a war camp through victory.
I'm not sure war-zones would even come back as an alternate to war raiding. These days though unfortunately the rules suppress a lot of dynamic conflicts from occurring, which includes mods pushing OOC chat delaying a raid in progress for hours. Frankly, it is quite depressing because these kind of activities create high energy for player activity and participation. I think it is very deteriorative to suppress small conflicts like these not only because it is a very fun activity but what is the point of having Monks if people don't die? They are there for a reason to practice making sure that regardless of what actions you take to progress your character doesn't mean the end due to Monk Revival, because that it solely up to your own story and decision.