An Alliance territory is any area in which Horde players will find their PvP flags automatically turned on. Any Horde player can be attacked by a player of the Alliance while in these zones. Unlike contested territories, it does not matter whether you are have war mode turned on or not.
All Alliance capital cities are considered Alliance territory to Horde players, regardless of the player's current war mode status. With war mode turned on, Alliance territory is extended to encompass all Alliance starting areas, as well as Loch Modan, Westfall, Bloodmyst Isle, Darkshore and the Deeprun Tram. Originally on PvP realms this meant that Alliance players were free to turn their PvP flags on or off whenever they liked in friendly territory, but with the new war mode system implemented, the players with the war mode on always have their PvP flag turned on, as though they are always in contested territory.
Horde players will see a notification on their screens when entering Alliance territory.