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The Coalition is explained in the original FL movie. The Alliance is the one who managed to escape total annihalation during the great war, when the 5 sleeper ships broke the blockade and finally made it to Sirius. Essentially, the people who fled originally were members of the Alliance. Bretonia, Kusari, Rhineland, Liberty and the fifth which contained the now Corsairs and Outcasts.

Ahhhhhh my old friend......you do still check the forums. @Phoenix....was trying to give you the short version, however NW just gave you some research to do.

NW whatever you need, see me in game.