I don't see how is different now. Big realms stomp small realms right now!
Small realms without active nobles don't survive and in small realms one noble can make the difference... Big realms where only the council decide and 50 noblemen follow orders, are no much fun either.
If this was the matter, all big realms would have a steady growing in noblemen, while small realms would had disappeared... is this the case?... and honestly, if this was the matter, why begun the number of players begin to fall??? If the number of players is the reason, and some years ago, we have the "good proportion" of them... then why begun the fall in players?
The most fun I've ever had in BM was 9 years ago when I was in a realm with so many nobles it wasn't uncommon to see 100 messages every time you logged in and that was considered normal. And the game was much more centralised back then.
And small realms have disappeared, massively so. One duchy realms used to be both commonplace and able to survive. Now they can get wiped out easily because most realms have consolidated into much larger ones.
The number of players hasn't begun to fall either - it's been in a slow and steady decline for years and years. Yes, there's been a spike in the number of players leaving the game now, but that's true of every big event in the game. When people's realms get wiped out some people quit. It's as simple as that.
On the other hand, if you look at the character density on Dwilight you can see it's gone from being just over 2 nobles per non-rogue region to over 3 nobles per non-rogue region. That's quite a good improvement, IMO.
And if people don't like being in big realms then the answer is to secede - just like people used to. The only reason we don't see secession as much nowadays is because duchies haven't got the nobles to survive as an independent realm and, if anything, increasing the noble density is likely to improve that situation.
