When creating your character, you are able to choose from 10 playable races. All races are compatible with any faction that you choose later in the game.
In SWG Legends, the difference between these races are mostly cosmetic. However, different races are subject to different armor restrictions. For example, Wookies and Ithorians each have their own armor sets, and Trandoshans cannot wear any footwear. To avoid any penalties to player stats, there are armor sets that all races can use, but it will appear invisible on the character, requiring the player to make use of the appearance tab.