Yeah, thats sort of the idea. You pick a faction, and try to position yourself so that the outcome ends in your favor. Its unlikely that the game will ever 'end', as we'll all get bored long before that, but its not entirely inconceivable that someone (or someones) could 'win' by conquering the galaxy.
Its largely story-driven (hence the term webstory), and most anything can be done if you can justify it. There are generally fuzzy guidelines for fleet building, research, etc, and you come to an agreement with an opponent as to what are 'acceptable losses' after an engagement.
The Game Master (GM) decides what's allowed and what isn't allowed tech-wise (Miranu with Bronev from a Voinian alliance? Sure, why not. Fleet-destroying super-weapon? Hell no ), and is the final arbiter of disputes and grievances (can't come to an agreement on the outcome of a fight, someone is being munchkin, etc etc). In the ideal scenario, I'd sit back and watch while you guys duke it out, but lack of participants may force me to choose a side.
As I said before, I'm trying to develop a dice-based system with more well-defined rules and boundaries, but its still in its nascent stages, and I'd really like to get people interested in webstories again before I attempt to find people to beta-test it. (Finding people for a conventional-rules webstory is a chore as-is!).