The moment the you switch factions, the AI takes over. From what I can tell, it automatically activates the government script, and all of the government buildings from your previous faction are damaged to 100% and replaced. The AI then expands normally.

I think what Cute Wolf is talking about is that you may have some trouble building some government types in your new faction, but I can't confirm this at the moment. There are a couple of ways you could get around this if you need to.