Or a new wanderer type called outlaw boss, that the system generates and randomly given to a few outlaw groups like Looters, or Forest Bandits.
I don't like the idea of levelled-up looters, but think larger groups should have some kind of leader.
I think it could be that :
When prosperity&security are low, then some peasants mutate into looters.
( there could be variation among the cultures )
The size of such groups is limited but gets a boost if they run into a deserter ( low-mid tier ) who joins them.
How big this effect is depends on the Tier of the deserter.
And for deserters itself it's similar, the number of troops of a tier is limited, but they can bind a bigger amount of lower-tier-troops.
If it get's too much cohesion will drop and a split occurs.
( so there will be no big elite-deserter groups )
And then bandits won't join looters, but they can recruit them ( this may fail sometimes if the looters have become too strong ), and if these level up they'll upgrade from T1-looters to T2-bandits.
Bandit's can't upgrade either ( otherwise there would be groups of leaders after a while ),
but there must be some stronger ones.
And at the end ( some ) minor factions have the ability to recruit bandits and then these can upgrade into faction-units, from T2 to T3, or maybe higher for the stronger ones.
So minor factions wouldn't mix up with looters, but bandits could be found mixed both with some minor faction-troops as well as with looters.