One of the recently-released Old School RPG systems (I forget the name of it) makes use of the idea of the "sieve" for starting characters, in which, to begin with, each player begins with three or five or however many lowest-level characters. As they inevitably die off one by one, the player will end up with one, which (hopefully) has proven to be tough and lucky enough to have a better than even chance of extended survival, and which will become the player's only character for some time. Effectively, it's kind of like the video game concept of extra lives.
Giving each PC a posse can be an excellent opportunity for the GM to introduce some intra-party conflict and rivalry without actually going the PvP route; effectively the PCs would all be very minor gang leaders in cooperation with other gang leaders for a specific goal.
I'd draw up a fairly simple relationship chart for the various factions (and maybe some of the individuals) and let them go for it, treating the members of their posses as followers, their actions usually under the direct control of the player with the understanding that the GM may direct their actions as NPCs at any time for dramatic purposes.
It's possible — even likely — that one or more players might want to try a bit of backbiting, bribery and corruption amongst his or her fellow PC's entourages. This is not the sort of behaviour that any self-respecting GM should discourage. :)
And, of course, let the players know that their posse is their available pool of backup characters in case of their unfortunate but inevitable grisly demise.
If a player starts using his posse as meat-shields to protect his or her own worthless skin, they may find themselves abandoned as their erstwhile followers transfer their loyalties (or simply run away) ....kind of a permanent loss of hit-points.
I suppose the players could choose whichever of their posse they want to inhabit as and when they die off and have to transfer characters, but to maintain the idea of the player being the gang leader, I'd suggest it would be better to rank them in order of Charisma, with the surviving follower with the highest CHA becoming the new leader (PC).
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