I tell you what's interesting about this situation: it's symptomatic of Buffy quitting the WC. I'm not suggesting that in itself was a ill-advised move because as Giles and later Buffy pointed out, she is the one in the thick of it. However, there is now no overriding authority on such issues (although one may argue there was never one to begin with).
Doyle and Wesley both touch upon some interesting terms in regards to Buffy and Angel respectively: "Renegade"/Vigilante. I've always maintained this means Buffy and Angel do not have 'imposed' authority, in fact they are their own bosses and they make their own rules. Faith isn't implicitly Buffy's responsibility nor Angel's. Both of them chose their paths and chose how to deal with such situations. Sunnydale isn't anyone's territory nor is LAs, Buffy and Angel chose to operate in those places.
A year before, Wesley gave Buffy a lecture on laws that have existed before civilisation but Buffy didn't care and to be honest I agree that, blindly following a patriarcal sytem, who seemed just as interested in dominance as they do in justice required a step that empowers Buffy and the individuals working with her. For a long time, Giles, Angel, the scoobies, all cooperated as a team. Although Buffy has made the plans, she as also taken advice, and let others make decisions in leiu of her.
Cooperation is fine, great even until we have a disagreement. If they are in disagreement, does anyone pull rank and if so, in which situation?
Buffy wanted revenge on Faith but also believed that Faith should be punished. I'll take punishment by prison out of the equation because I agree with Wes and Angel that holding a Slayer in prison against her will is pretty dumb, I'm still not even sure why Buffy suggested it, (perhaps her anger was chipping away at her IQ points). So the only option left that Buffy was willing to adhere to was 'Slayer law'. In other words Buffy would get the final say as to what happens to Faith. After everything that Faith did to her, she feels she has a right to make that call.
Angel doesn't think Faith should simply get away with what happened. If she were totally soulless or sociopathic, this may be different but he believed that Faith did feel remorse for her actions and therefore, simply living with it is punishment in itself. He also thinks Buffy intervention will have a detrimental effect on Faith's redemption. Angel believes in saving souls, that's the path he's defined for himself. He chooses not to let Buffy interfere because it goes against that credo. His soul saving mission is part of his redemption and he isn't about to let Buffy balls it up.
Both viewpoints seem incompatible and this is problematic when dealing with the good and plenties. Unlike the WC and Initiative or even institutions of evil, their main priority isn't simply the jealous coveting of power, it's about what's right or what they believe is right. I personally don't think Buffy has rank over Angel in LA or Sunnydale unless they somehow formally agree on guidlines. Angel implied that they had agreed to 'deal' with their respective towns but as I think Keanoite said, that was as much about their relationship as it was about jurisdiction, arguably more so.
The saving grace happens in The Yoko Factor when Angel apologizes for what happened in LA. At first I though "Why does Angel have to apologize?" but then I looked at it from Angel's perspective. It wasn't simply about being right but mending the fractures in the relationship. Buffy also apologized for making judgements about Angel was trying to do. This doesn't magic away the issues between Faith and Buffy (as we see) nor does completely define the lines of authority among the good and plenties. What it does do is instigate the foundatioms of a situation where Champions can coexist and cooperate without being too detrimental to each others mission statement. This is more likely to happen when Angel and Buffy at not fighting each other as champions or ex-lovers.
