((taken from the wowwiki website))
"The Alliance is one of the two political facitons on Azeroth.
The Alliance does not have a uniform governmental body, but instead is a coalition of mutual military and economic aid. Housing the Alliance Assembly, Theramore can be considered the official home of the Alliance, but both the people and the leadership of Stormwind find it hard to accept. The inability of Stormwind to act forced both Theramore and the night elves to step in, resulting in a growing gap of cooperation between the two continents. Effectively, today's Alliance is in fact two Alliances not only working largely separately but also holding some kind of dislike against each other. Jaina Proudmoore and Tyrande Whisperwind are good at coordinating their efforts on Kalimdor, Lady Katrana Prestor of Stormwind is doing a fine job of undoing the Alliance in the Eastern Kingdoms.
In the past, certain rules, customs, and regulations were a constant hindrance to mutual actions across the entire Alliance. This made cooperation sluggish, and considerably slowed the rate at which the Alliance was able to reclaim its former lands and glory. Despite the problems and intrigues within their leadership, all parts of the Alliance are steadfast in their desire to reclaim and rebuild, and all members share a distrust of the Horde. The Alliance is a great and peaceful body overall, their might being legendary, but their desire for peace, even stronger.
Even now, as always, humans are the glue that hold the Alliance together, being the most numerous and diplomatic of the five races. However, the driving force of the Alliance is slowly but steadily shifting to the night elves, who today are a major aspect of the Alliance military forces — whereas the armies of Stormwind keep being held inactive within the city walls."
The Two Alliances:
"Although no official statements have been drafted, there are essentially two Alliances now, one on Kalimdor and one that operates out of Stormwind Keep on the continent of Azeroth. The alliance citizens in the east consider those who left to have abandoned them. They understand the war with the Burning Legion is over, and that there was a victory; but life is so treacherous with demons, necromancers, undead, warlocks, and rogue Horde bands attacking, it certainly does not feel like there was a victory. If those heroes who won the war were so powerful, why didn't they come home to help drive out the undead and take back their lands?
The newer Alliance, incidentally, is also upset with the older one, as it attacked Durotar without Theramore's approval, and the city was nearly razed because of Admiral Proudmoore's foolhardy actions. Although most in the city agree with the forces who attacked Durotar, they do not appreciate the newcomers goading the orcs into attacking their new home."
Read about each of the Alliance races:
Night Elves
Human
Dwarves
Gnomes
Draenei