As seen on many occasions throughout the series, Nico is a people person. What I mean by this is that he is very good at making alliances and connections, but not just with other people, but with gods from other pantheons. This is seen in the Italian short story, Un Natale Mezzosangue by Rick Riordan. Nico is shown to be good friends with the Etruscan god Charu. There's no telling how many other connections he has with other gods. One other notable connection is the Trogs, reptilian creatures that burrow underground and can murder a group of people in seconds.
His history with the camps and Zeus
One possible reason Nico would have ended up being a villain in the first place would be because of his history with the camps. He is constantly feared, shunned, and made fun of by the campers. He's given so much for both camps (even almost his life), yet he gets nothing but utter disrespect in return. Another thing I could see adding fuel to the fire would be his past with Zeus. Zeus tried to kill him when he was a young child and murdered his mother in front of him (I can also see him forming an alliance with children of Hecate over this as well because they were also threatened by Zeus). This may be a stretch, but Hades could also be a factor. Hades manipulated him for years and told him he was better off dead. Not to mention he made Minos judge of the dead again after he brainwashed and tortured Nico.
His powers and abilities
Nico is one of the most powerful demigods and probably the most dangerous as well. Apollo, a whole god, said himself that he wouldn't want him as an enemy. Nico can also raise his own army and train with powerful deities. Nico is also a very tactical thinker, he would figure out ways to take the camps down from the inside out.
Other miscellaneous thoughts I have
This would make total sense for his character since his fatal flaw is holding grudges.
Once Nico figures out how to control bones inside of people, it's over for everyone (bones, in general, are 50 to 70 percent mineral, and since he has geokinesis he could possibly control bones inside of people)
Nico as a villain in Heroes of Olympus would have been so much better than Octavian and Gaea
He would recruit Hazel as his second in command after getting her from the underworld in an attempt of recruiting Bianca.
Nico could have easily destroyed both camps, and I stand by that. There is a reason Rick didn't make him a villain. He's too powerful.
Just imagine an entire army made up of various gods from forgotten pantheons, children of Hecate, murderous reptiles, and skeletons. That would be terrifying.
Is this even coherent? I doubt it. I'll edit it in the morning, I'm too tired.