Lucky Day
Daywatch
I think a lot of this has to do with your group and maturity. I always was the DM, and I let this go as a teenager, because I thought everyone should have the freedom to play as they want. As I grew older, I came to realize it was no fun for me to run these scenarios, so at two points I told players "I'm not going to play this situation out. Either we play together as a team, or you can find a new DM. In one situation a player left the group (which was no loss) and in another the player left for one session and then asked to return after agreeing to not try to off or steal from the other players.
We had factions in my NWN PW and most of them were in conflict with each in one way or the other. It was based on Wheel of Time. Any PvP though was always DM monitored and part of an event. But that didn't mean there weren't griefers and that meant the ban hammer and groups of the faction dealing with the trouble maker until that could happen. Duels were another thing and the opponents tended to sort that sort of thing out themselves.
One thing I wanted left in the game is AoE spells and other things like that could damage you or your teammates so it made it harder and made them play smarter. I felt like it was my goal to keep people challenged all the time.
Regarding griefers, many times they would insist they were "darkfriends" and "playing their character" by randomly killing people in broad daylight on the street. As far as managing them, keeping them in the Darkfriends at least kept all my problem players identifiable and in one place.