By default, each of the game’s playable races belongs to one of three factions: the Daggerfall Covenant, the Aldmeri Dominion, or the Ebonheart Pact. Depending on your priorities, your choice of race determines your faction, or your choice of faction determines the races available to you. In either case, faction selection determines your allegiance in the Alliance War, certain quest locations, and your character’s starting area. If playing Morrowind, the player begins off the western coast of Vvardenfell, no matter the alliance chosen.
Each race offers a unique selection of Passive Abilities. The first racial Passive is active as soon as you reach Level 5; remaining racial Passives can be unlocked as the character progresses.
The nature of racial Passives means that each race has its own specific strengths. For example, High Elf Passives increase Maximum Magicka, Magicka Recovery, and various elemental damage types, while Redguard Passive Abilities increase Maximum Stamina and Stamina Recovery. All things being equal (build, equipped gear, playstyle, etc.), a High Elf’s Magicka abilities will always be more effective than those cast by a Redguard—of course, the Redguard will always have the advantage in Stamina abilities, sprinting, blocking, and so on.