So it's not easy to make that arrow. Right. see, this is why I'm having a hard time helping you. Every time I come up with something, you tell me it would be too hard to do in the campaign or just won't work.
I think what I actually said, at least originally, it to make the group compelling.
And since each player only has one character, and the gm controls the rest of the universe, the gm has to be a whole lot better at making good characters than the player.
Right now, tainted by my traditional understanding of Robin Hood, I feel like I'm supposed to hate John because of how he treats Richard. so I don't want to side with him. But I also don't want to side with Richard because he was such a jerk to his father. John still doesn't have my sympathy because he helped John.
On the other other hand, I don't like this covenant either. Bunch of wanks encouraging and protecting the people who raped my mom and stole our only wealth. I also don't want to be on their side because they seem to be alienating EVERYONE. Perhaps if I had some sort of belief in their cause other than "it's a magic place" I might want to forgive the fact that they seem to enjoy pissing people off. So I think I'm going to side with the Spanish kingdom and invade England, using the Norse as mercenaries (I don't even have to pay them, just let them keep what they pillage, and realize that I'll have to wait till they want some more kit before I can take over a new town).
So... make the covenant itself something more than just some power hungry bastards. Make them care about the people. You can leave in the people not trusting them, but have THEM not be a group of self-absorbed jerks.
Things being "tense" between two groups doesn't make for an interesting plot unless one side starts something. If I'm one of these Magi, I'll just realize don't start nothin', won't BE nothin'. I'll shop with the locals so they like that they can get money from me, but other than that I'll just leave them alone. I rigidly punish any workers who commit more crimes. so maybe the Sherriff gets made over some previous crimes, but I either turn them over for serious crimes, or I deny the extradiction. It sounds like it's unlikely they'd actually do anything to my group in that scenario.
So... No one likes me, but no one's going to come after me. Not in any serious way, at least. So,... .where's my conflict?
Oh, and I *have* told you a way to make them sympathetic. Make John a pretender and a rebel earlier on, and make the Magi loyalists. They have something good I can respect in that, and they have a clear enemy. voila, problem solved. I'm sure there's another way you could do it, but that's the first that comes to mind.