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I'd say if the character is in a kingdom that has laws, and breaks the laws to take EQ from a NPC, that is not principled.
Nonsense. Do you really expect a principled character to respect the laws of the Empire, Northern Wastes, or the deep-elf city? Principled characters have to be true to a respectable set of principles. Unquestioning obedience to law need not be among them.
I realize enforcement is easier with strict rules, but there's no way around it. You need to talk to the player to see if he's roleplaying his principles, or breaking them just to get EQ. Or we could copy Carrion Field's role command, allowing a player to describe his character's role similar to a desecription, to the benefit of immortals judging roleplay.
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Groups are stronger than individuals. With allies, the goal (whatever it is) of the diabolic character is more likely to be achieved=very happy diabolic character. And yes, diabolics can be happy.
The problem isn't diabolics wanting to use a group, and being generally loyal for that purpose. The problem is diabolics as respectable members in organizations not similarly twisted. If the diabolic is just successfully hiding his madness, that's one thing. But if the diabolic isn't actually doing diabolic things from time to time, something's wrong. Likewise if even a half-decent organization happily follows along in such wickedness.
Example: I could see a diabolic in the MC. He's a good enforcer, and if he likes his work a little too much, he's useful enough to tolerate the occasional problem. But is a basically aberrant group going to have respect for this guy, or trust him with important secrets? I doubt it.