It's possible to switch factions in mid campaign, but it isn't suited for EB due to the way the government system works. The "government resource", which determines where you can use type I and II governments, is placed at the start of the game. If you switch a faction, these don't change, so you have to deal with the government restrictions of your previous faction. (The A.I. gets its government buildings placed by the script, so it isn't affected by this condition.)