These three options are for you and your fellow alliance members to categorize the enemy alliances according to your relation to them. Only Lords or the King of an alliance can define the relationship status to other alliances.

Please note that these relations are only visible for you and your alliance members, not for other alliances. It might happen that you categorize an alliance as "peaceful", while they categorize your as "hostile". Therefore you might talk to the other alliance first to establish the relation beforehand.

The status will not automatically change from "peaceful" to "hostile" if an hostile action happens, it always needs to be done by you.