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Scrimbul
You lose powers from demotion. There is no way to pick and choose what powers you lose from Village for instance. If you want Anathema to be the rule rather than the exception, you probably need a lobotomy. Goodies, especially noobs, walk a far wider line than Imperials and are far less likely to be punished for less-than-good actions whether by cabal leaders (impossible to police) or the Imms (difficult to track all the information involved unless you're good-align coddling Baerinika)

Fortress has decent powers and a huge drawback if you're a PKer type. They can't kill Goods, ever. And they can very rarely kill Neutrals. If you ignore this drawback and break "Good align law" then you won't just be kicked out of the Fortress .. you'll probably have your align changed, lose skills/spells/communes, and get a brutal holy vuln.

Imperials have awesome powers, can kill anyone they want to, and because politics/anathema doesn't happen, have one drawback. They can't attack in towns. If you're a PKer type, Imperials are clearly the way to go over Fortress. People who complain about Fortlander are pretty lame - 99% of the time it means your victims won't just log out and will come to you instead. Now, if they can't live by that one stupid drawback, I think an IMM should step in and anathema them. They won't lose skills/spells/communes, they won't get a brutal holy vuln, they can even join another cabal afterward. They just get kicked out of Empire. Relative to what happens to Fortress, I think that's pretty acceptable. For other less-than-good-Imperial actions (grouping with orcs, aiding other Sects, or whatever) I think demotion is more appropriate.

Basically, Empire NEEDS an enforced anathema-level drawback to balance its strengths. Demotion can be used for stupid things that don't amount to breaking Imperial Law.