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I feel that is is basically something pulled out of WoW, or Guild Wars, as Stealthy mentioned.
POTCO isn't made to be a extremely competitive game, where territories are fought over. One, it wasn't built to be able to handle it technologically. Two, it wasn't meant to withstand the battles socially either. I already see guild feuds, and I would wish to stop that from reaching another level.
SvS and PvP is one thing, but it's not a guild sort of idea. It focuses more on the individual who wishes to test his/her mettle against many other fine pirates. Put in a Guild Warfare system, and people will start ranking themselves against one another. How many battles have you won? Against whom? Ah yeah, <insert guild name here> must be horrible. And <insert pirate name here> was the worst on their team!
I just don't see this system working out for Pirates. Sorry mate!
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