2 teams works, more than 2 teams doesn't. The balance becomes too lopsided. Best possible team setup you could use if you want them both to be balanced:
Race War using race as selection variable: each team gets every class
Dark Elf Alliance (evil)
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Dark Elf
Troll
Iksar
Ogre
Half Elf
Erudite
Human Alliance (good)
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Human
Dwarf
Gnome
Halfling
High Elf
Barbarian
Wood Elf
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