I would imagine using fear as a way of rapidly controlling a region. So, hanging rebels, police raids, rape and killings, would inspire fear fairly quickly and thus being able to pummel the population into your realm. The downside is that fear would be reduced faster. If your not inspiring fear, than the population would rather start wanting to rebel. Loyalty on the other hand would be much harder to earn, but it would last much longer. Realm's would want to use fear during war to quickly takeover regions and deny their enemy resources, but if peace came, loyalty would be more viable since maintaining the regions would cost less.