So here's the deal. Iashalur just took over Darfix, our second city. I wanted to declare it a new duchy with myself as duke, which shouldn't be to hard considering I'm King of the Realm.
Completely unnecessary. You're already a duke. You don't need to demote yourself to non-duke, only to redeclare yourself a duke.
I tried making a nearby towns-land its own duchy, but the current lord was automatically made duke.
The game specifically tells you when you create the new duchy that the lord of that region will become the new duke.
"By promoting the region lord to duke, you effectively remove his region from the duchy it currently belongs to and turn it into a new duchy. Other region lords can then join this new duchy."
You did not need to step down as Duke of the Gaston duchy. You should have just renamed it to the Duchy of Darfix. That makes you the Duke of Darfix and Marquess of Darfix. Then if you wanted a second duchy in the realm, you could appoint a new lord to Gaston, and bestow a duchy upon him.
