A Factory is a production center in TripleA. Factories never participate in combat except as victims of bombardment. They can be captured. They produce a number of units up the value of the area.
A factory can be given unlimited capacity for the original owner by including the following option in the territory attachment:
<option name="originalFactory" value="true" />
Also the following game property could be used for stacking factories:
<property name="maxFactoriesPerTerritory" value="1"/>
The AI never produces factories.