There are no more "Empire" "Vampire Counts" and the like. There are the four Grand Alliances and sub factions in each one. There is backstory on a bunch so far, and as the story develops, they will be expanding the backstory on the others too (Godbeasts began introducing human survivors).
Freeguilds is so far just a name, I'm sure the Grand Alliance Order book details stuff about them, and future releases will flesh them out further.
The different sub groups of units often share a theme and sometimes special rules which reward using units together in that theme, but there is no hard and fast rule on what units you need to include in your army. Typically, as long as all the units belong to the same Grand Alliance, you can use whatever you want.
The races are not aligned to certain magic, but there are eight realms (plus the realms of chaos) which are. So, your armies fight on different landscapes which could be shaped by one of the realms of magic (Chamon, is based on the lore of Metal, so rivers could be molten silver for example), and there are Time Of War rules you can use to add special rules to your games to reflect this (if you'd like).
No units are really based on any realm of magic or another. Except Chaos and the Seraphon (who are from the Realms of Chaos and the Celestial Realms accordingly).