As an old AD&D 2nd Ed player, in my mind alignments have always meant a combination of the Good/Evil, and the Law/Chaos axis. When I picked up LL, I automatically referenced the alignment-system I was used to during the character generation process. Now, having had some time to think it through, I'm having second thoughts.
I happen to enjoy morally ambiguous characters and challenges in my games, and I think the "newer system" can leave too little room for grey, and thus it tends to box the players in. The conflict of Law and Chaos, on the other hand, offers plenty of space. As such I have decided to omit the Good/Evil part of a character's alignment, and thus let the dice fall where they must.
There is another use for this though. Fans of TSR's Birthright setting will remember that there realms were given alignments. I think this may be a good place to insert Good and Evil into the mix. A chaotic realm will rarely have a stable government - it may be a confederation of noble houses, a lose tribal confederation, or a clan-based society ruled by strongmen. A lawful nation on the other hand, will have established rules and dogmas that will bind even the ruler. In a good kingdom, the powers that be will generally strive to make sure every inhabitant is cared for as well as can be, and that what laws there are are not abused. An evil realm will use oppression and violence to force it's subjects to conform with whatever custom or decree may dictate.
In my LL game I will apply alignments to realms and organisations. To give an example of how this will work: A realm's alignment will be influenced by it's ruler's actions, but also by the, to use a cliché, collective soul of it's people. Still, a Lawful, but ruthless and sadistic ruler may rule a Lawful Good kingdom for a generation. There may be rebellions, but many will follow their king because the law demands it. Eventually one of two things will happen, either the evil king will be replaced by a benevolent ruler, or the realm's alignment will change.
The main reason for why I will use this system is to give me a tool to help me define a larger entity, and to provide more detailed guidelines by which I can judge these organisations' actions and reactions as the story progresses.
As always, if you have any questions or reflections, I'd love to hear them.
[Picture source: Heroes of Might and Magic V wallpaper]