Yeah if you remember the Empires games then that was how they did it, but once again, Dynasty Warriors kind of sums it up. They automatically re-name nations due to it's ruler such as Han Empire, and Wei forces. The battlefields would be the most typical thing to worry about as far as names. And times like the brotherhood bond with Liu Bei. I'm down to RP!
And I like how this has been put together. With the Lord tip though, most of the people in DW die along the way, as well as a complete change of generation, so I think as long as we choose who we want and make the rest NPC for the moment, leaving them for when someone else wants to join, someone wants to change the tides of the war or future by killing them, or our character dies of age, would seem practical. I think you guys can handle the rest. But we need to make sure the lords of the beginning are covered. Like you said, Liu Bei, Cao Cao, and Sun Jian should be the most prominent along with Yuan Shao. Plus, since your making the RP you should also have someone play the emperor, controlling the national army and environmental effects, such as snow, rain, and and seasons.