In SMT, both Chaos and Law have their upsides and downsides.
Chaos tends to advocate free will and making one's own path in life. On the flipside, it does so through "might makes right" and "survival of the fittest", where the strong can do whatever they want. Law, on the other hand, advocates peace and equality. Downside is, it does so by removing free will and through merciless judgement.
Obviously, since either side can be your enemy in the games, you tend to see the extremes more often than not, but you do see lesser examples of each one occassionally.
Neutral, which is often treated as the "true" route and is right in the middle of the two, is the one that tries to find a balance between their ideologies, and/or works towards what's best for mankind in light of the other two extremes.
At least, that's how I interpret them.