The Republic of Calpheon was formed after abandoning their previous feudal system during the long ongoing conflict with the Kingdom of Valencia. The Xian Merchant Guild is the major power in the Republic now. Currently not only the territory of Calpheon but of Balenos and Serendia are under the rule of the Calpheon Republic.
The army of the Republic of Calpheon is known as "Army of the Black Desert" too and clashing with the "Army of the Red Desert" (Kingdom of Valencia) every so often as PvP event in the game. The reason for the conflict is the Calpheon attempt to secure the Black Stones found in abundance in the desert and preventing Valencia from access to this resource.