The political unit of Might & Fealty is the realm, which means a collection of settlements under one ruler. Those settlements can be estates of different characters, and realms can also be part of larger realms or contain smaller realms within.
There are seven types of realms, in order starting with the smallest:
These can contain any number of smaller types, so a kingdom could have one ore more duchies, marches, counties or baronies, but not the other way around - a march cannot contain a kingdom, nor other marches, but it can contain counties or baronies. Realms that are not part of any higher realm are called major realms and are shown on the map.
Realms that are part of another realm count towards that realm with all their nobles and lands, but at the same time also keep their own identity. So for messages, for example, members of a county that is part of a kingdom will have access to the realm communication of both the county and the kingdom, while, say, other nobles who are members of a march that is also part of the same kingdom get their march realm communication, but no access to the county.
You are free to set up any hierarchy you want within your realm. You can have it as flat or with as many levels as you want, it is entirely up to players to define the internal politics and structure of realms.
All characters can be members of several realms at the same time, even in different hierarchies. That does also mean they could have a case of conflicting allegiances, in the worst case being a member in two realms that are at war with each other. This is a situation rife with intrigue, mistrust and treachery and thus left entirely to the players to resolve in whatever way they see fit.
Settlements and Realms
As opposed to characters, settlements can only belong to one realm. Even if their lord is a member in several realms, the settlement has to belong to exactly one. The lord can, however, change the settlement allegiance at any time between all the realms he belongs to.