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Another term for an interest group is indeed a faction. These words are typically used interchangeably in most situations in the world.

Second position. Factions among a governed population are the inevitable result of any form of government. A faction and interest group cannot be interchangeable without a definition of the former term.

The problems of factions were ably addressed by the Framers of the US Constitution. A faction is a number of citizens whose size may be a distinctive minority or a majority. They are frequently linked to a commonly held belief that is adverse to the rights of other citizens. This belief has the ability to become a permanent force denying the to citizens their rights as previously designated as correct and lawful.

With that said, an interest group, dedicated to increasing the number of public schools a city should have, does not necessarily injure the short or long term interests of citizens.

In Germany in 1930, there arose a faction and in fact factions that had the ability to injure the rights of most German citizens. Two such factions were the Communist Party and the National Socialist Party or commonly called the Nazi Party.

It would be an error in calling these bodies as "interest groups" in the common usage of the term.

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