When one faction has an army greater than all the others, what are the plans of the game to try to counterbalance this and keep the war healthy?
Its something that can happen, we just need one of the big alliances to begin to fight all over one city only and with that overrun the other 4 cities and over time will gain more and more fans.
This is addressed on multiple levels
factions are super easy to change (but: for that, you must be in the faction's city). No penalties or standing losses. Narrative is that everybody is a merc, and it is understood that mercs change allegiance regularly.
each faction gets a faction specific resource, *all* of them are needed for the economy. If one faction has too few players, that resource will be worth more due to supply and demand, hence encouraging people to join up that faction (remember: factions are easy to change)
To join a faction, you must be in that factions city. Furthermore, entering another faction's city - and entering Caerleon - will remove your faction status. This means that the relevant royal city will naturally be that factions "staging area/starting point". Now, faction warfare objectives (encampments in the open world) can be captured from other factions for points. Naturally, the more you already own, the fewer targets you'll have nearby. Conversely, if your faction is currently pushed far back - literally to your city's gates - you will have a lot of potential targets nearby. The more area a faction already controls, the less attractive it becomes to play for that faction - it's a self-balancing back and forth.