From BrWiki
Domain and Regency » Government » Feudal
A Feudal domain is different from other adjectives describing government in that it doesn't describe the concerns of the domain so much as how the domain is organized. Towns, guilds, wizards, temples, and landed nobles can all have Feudal arrangements with a regent. It describes a system where the regent has subordinates from any kind of holding, who are expected to provide justice and protection in exchange for the support and aid of his subordinates. Each of these subordinates has subordinates of their own and so on.
Feudalism is most common in Anuire where the teachings of Haelyn support the proposition that the various domains in a shared area should properly follow the lead of a landed noble. Avanil and Boeruine are examples of strong Feudal domains where holdings of every time ultimately answer to the Prince and Archduke.