I imagine creating a duchy for the Townsland and then requesting that individual to step down so that the Ducal Seat could be transferred elsewhere might be considered bad form, but I don't know the ins and outs to these particular matters. The margrave of the Townsland would be recompensed of course, but still, curious as to if there is some rule against me doing something like that.
Also, you don't actually know that the margrave will step down until after you appoint him. He could trick you.