You can use teams to model formal and informal alliances. When you put two races into the same team, they will by default behave friendly in the Battle Simulator. Units of races in the same team as you will be shown in yellow instead of red: use this to mark your allies.

PCC2 supports optional automatic synchronisation of teams. Whenever you offer an alliance to someone, they will be put into your team. If there is someone in your team whom you do not offer an alliance, they will be dropped from the team. This way, you normally have to deal with your alliances only, and can let the teams manage themselves. If you do not like this feature, turn it off using A.

  • Arrows: Move around
  • Space: Make current race (line) belong to current team (column)
  • N: Assign name to current team
  • A: Toggle auto-sync option

Reference

Keys:
T from race screen