I personally despise the idea of duchies warring against duchies in the same realm. It would essentially destroys the last vestiges of team play in BattleMaster. If you want to fight another duchy, then one of you two should secede and proceed to get to fighting.
While in the past I have been a proponent of allowing inter-realm warfare, I tend to agree with Indirik about team play, which I am increasingly convinced is important to maintaining the game.
