I have always been a fan of the three point alignment system, and luckily it is imminently well suited to Fantasy Europe.
As with so much other OSR stuff, this takes inspiration from various discussions in the past, across the interwebs.
Fantasy Europe is a time of change, and of upheavals. The followers of the one true god wage war in the holy lands against the heathens. The defenders of the faith battle the invading infidels. The followers of the old faiths bide their time, and try to survive in the corners of civilization.
It is impossible to discuss a vaguely historical setting without discussing religion as well. Some players will be fine with this, while others may be uncomfortable at the idea of real life religions, or passing judgement on such. I don't subscribe to any religious belief, but I think gaming is more important than controversy. As such, I will use "one true god" for europeans, and "defenders of the faith" for middle eastern beliefs. These terms are intended to be "in setting" descriptors used by adherents of their respective faiths. A DM who wishes to avoid social conflict in his game can abstract a fair bit of religious belief without causing undue damage to the setting.
Lawful in this setting tends to signify civilization and the rising monotheistic faiths. It's the spread of doctrine, law and the hierarchy of society.
Lawful characters may follow the one true god, they may be defender of the faith, or they may even be heretics following some variant doctrine. They all, however, tend to feel connected to a larger society than their own, whether their ultimate loyalties is to church, ruler or nation (itself a relatively recent concept).
Lawful alignment then is an indication of world view, and not inherently "good" (though most would consider themselves such).
Chaotics are then those who oppose the structures of Law. This may stem from a rejection of authority, adherence to the darker powers that lurk in the world or a staunch rejection of faith altogether. It's important to note then that chaotics are not always "evil". They have motivations just as heartfelt as any knights templar. A chaotic alignment however requires more thought, since the player needs to determine what world views the character holds.
Regardless of their origin, those who actively oppose the encroachment of Law will tend to attract the attention of the powers that oppose it.
Neutrals are the old faith and the slowly forgotten ways. At the edges of civilization lies a bewildering array of old cults and beliefs, still upheld by stalwarts, sometimes out of the publics gaze. Many neutrals tend to hold naturalistic or even animist views of the world. Some seek a balance between old and new, while others reject the alien influence of light and dark.
There's no inherent need for all the characters in a group to hold the same alignment, but of course interesting problems can arise. A single neutral in a group of lawfuls may live dangerously, or she may simply be viewed as a dependable companion with curious beliefs.
Alignment languages then take on an actual meaning, in that they represent religious trappings and concepts, rather than a language as such. Two lawful characters would recognize each others rituals and be able to communicate basic concepts to each other, even if they do not share a language. Likewise, a neutral would recognize the rituals for what they are, even though he would not understand the significance of them.