Its really an excellent system honestly - the Lords can pressure the Dukes, the Dukes can pressure the Ruler. It's not a Top-down effect, of nobles being told what they are doing. It's the Lords (and their knights) telling the Dukes and Rulers what they want to have happen.
The problem is of course, a good ruler is required in this system, one who can work with the Dukes/Lords and convince them that things are worthwhile.
Well - really now, getting Caerwyn to back off was the important thing. Madina wasn't REALLY the threat at all, we can only hit Paisly so many times . . . getting Caerwyn on your side was the back breaker, and an excellent diplomatic move.
Lets be honest as well, if we had a good peace with Terran and D'Hara, like we do with Fissoa. . . well. We'd never have anyone to fight. Ever. Terran's about as far north as we can go, even with Mercenary troop settings.
Much better to have uneasy peace with D'Hara and Terran, knowing that a diplomatic folly on either side could end them up in another war. But, speaking more bluntly, none of our Realms have the character count to conduct an extended war. It was tough to do when we had 35-40 nobles, but at 15? We'll just sit in Madina or the Tower and let you come to us thanks.