One of the things about the lore of Azeroth that struck me is the relative weakness of both Alliance and Horde. They each had four races, now expanded to five. Both sides appear politically fragmented as well as geographically isolated.
On the Alliance side, you have the Dwarven capital of Ironforge. The dwarves seem to be the most stable and secure of the alliance races but are not without troubles. The influx of gnomish refugees puts pressure on the resources of the city. Political pressure to help the gnomes recapture Gnomergan adds extra strain. The main weakness of the dwarves is the relatively low population and low birth-rates.
The other clans of dwarves around Azeroth are frequently opposed to the Ironforge clans.
The Gnomes were never great fighters. The loss of their home city basically wiped out the gnomes as a military force. Their magical and engineering skills are very valuable in support of the dwarves so they still have a large role to play.
The Night Elves lost virtually all their territories in the last war against the burning legion. They lost a significant proportion of their population and their world-tree was destroyed. Perhaps the greatest sacrifice was the loss of their immortality, though it appears that elves have long mortal lifespans in any case. The misguided raising of the new world tree Teldrassil has exposed various political factions within the formerly unified Night Elf ranks. Tyrande, possibly the greatest single individual on Azeroth, sorely misses the support of her lover Malfurion. 10,000 years of wise leadership may have left her unable to be flexible enough in the changing environment of today.
The Humans have the potential to be the strongest grouping amongst the Alliance. They still have significant populations in several areas of Azeroth. Their military, magical and technical abilities are still significant even after decades of war. Their great weakness however lies in the many factions that are vying for power. Stormwind is "ruled" by a figurehead king, a ten year old boy. His immediate advisers are representing several different factions, and one indeed is not even human at all. There are great problems in the lands claimed by Stormwind and they simply do not have the manpower to address all threats at once. There are many hidden groups within Stormwind, each working on their own goals.
There are also the remnants of other human nations. Dalaran has completely isolated itself in a glowing pink dome. Gilean (sp?) has walled itself off to avoid contact with the scourge to its immediate north but there are dark rumours that things behind the wall are not well either. Stormwind is left without external allies, other than the dwarves.
The newest members of the Alliance, the alien Draenei, are the survivors of a crashed starship, who themselves are the remnant survivors of the wars on Draenor. Powerful as some individuals are, the Draenei add fairly insignificantly to the overall strength of the Alliance.
Leadership amongst the Alliance is not clear. Each major grouping has its own agenda, sometimes at cross-purposes.
The Horde. No longer as tainted by demonic possession and other fell influences, the Horde is nevertheless still plagued by internal problems. Each faction within the horde is relatively low population. Most have significant internal problems as well.
One huge benefit the Horde has is the overall leadership of Thrall. Each of the other factional leaders seem content to follow Thrall's lead in matters so far. This gives the Horde a much clearer sense of direction and purpose than the Alliance.
The Orcs, Thrall's own people, are almost certainly the single strongest Horde faction. However, they are essentially a refugee population, the remnants of the great orcish armies trapped on Azeroth after the closing of the portal. Thrall's entire population was once kept in internment camps under the guard of human forces. They have had an amazing journey over the last decade but have not had significant time to repopulate, and Durotar is hardly the most fertile realm.
Though Thrall's leadership is essentially undisputed, there are many factions amongst his people, some of whom are particularly corrupt. The influence of the burning legion is an ever-present threat.
The Darkspear Trolls, like the gnomes on the Alliance side, are a small refugee population. Almost wiped out, they have lost their homeland several times and have recently lost control of their adopted home, Echo Islands. They are almost completely dependant on their orcish allies for continued survival.
Many other troll tribes survive. Most of these are completely hostile to both Horde and Alliance. Trolls as a whole are an unruly mob and must provide Thrall with plenty of headaches.
Thrall's other close allies are the Tauren. Cairne and his people follow Thrall and the orcs out of gratitude for their rescue from almost certain extinction at the hands of the centaurs. Their homeland of Mulgore is now fairly secure and their culture has started to rebuild. Cairne's rule is not unopposed however, and several other factions exist under the surface. Several tribes of Tauren do not follow Cairne's rule at all and indeed are bitterly opposed to the Horde. Cairne is also now very old so possibly may not remain unchallenged for much longer. His sons are not held in nearly the same respect as he is, so succession is not clear.
The undead Forsaken are the last of the original Horde races to join. Undead creatures, these monstrosities are not a true race at all. Their very nature acts to destroy life around them. As Arthas/Ner'zul's strength diminished under Illidan's assault late in the last war, significant numbers of former Scourge found themselves with free will again. Sylvannus, already a commander under the scourge, took command of most of these free-willed undead and retook the old capital of Lordaeron as her new seat. Revenge seems to drive the undead. They assist the horde only as much as necessary, spending most of their energies focussed on ways to destroy the lichking. Of the original horde races, the Forsaken are clearly the most evil, willing to go to any lengths to get what they want. It is uncelar if they are able to "reproduce" as such, either by freeing other scourge, or infecting untainted humans with plague. Sylvannus seems to have the undivided loyalty of her people, lacking the factional squabbles that other races have. She does however have a tiger by the tail, in the form of Varimathras, a formerly high ranking member of the burning legion. Loyalty is something unknown to these creatures but Sylvannus knows this.
The latest race to join the horde, the Blood Elves, are even less trusted and reliable than the wilful Forsaken. Originally, the High elves were members of the Alliance. Due to various twists of fate and the racism of noteable human commanders, The remaining former High elves approached the Forsaken for assistance. Renamed Blood Elves in honor of the fallen, these elves are the most power hungry, egotistical, maniplative of creatures. The loss of the magical energies of the Sunwell is cripling to the remaining elves. They are absolutely driven by the need to regain a source of magical energy. Recent events have lead to the realisation that they have been completely betrayed by their leader Kael'thelas and some Blood elves have sought redemption by aproaching the Naru in Shattrath. Hopefully this may lift the blood elves from an otherwise very steep decent into depravity and evil.
Overall, the horde has significantly less military strength than the alliance, but is a lot more organised. Both sides have almost overwhelming internal and external threats, yet are preparing to fight against the burning legion once again.