Powerful local lords were the main part in the start of a Feudalistic society. Being center of the system.
Lords had lesser lords known as Vassals who they divided their land amongst. They had an agreement known as a feudal contract. Where in return for the land, the vassals pledged service and loyalty to their lord.
Lords and the Peasants
Feudal relationships became more complex as lords had multiple vassals. If the Lord chooses to fight with other lords, a vassal who was loyal to several lords could have serious problems. This caused the vassal to unite with a lord who he owed his first loyalty
A Balanced Society
During the early Middle Ages, powerful lords built castles to withstand attacks from invaders. Nobles and Monarchs owned their own castles. This would start many wars to seize other castles.
Lords and their peasants had mutual rights and obligations between each other. Peasants had to work on the lord's land. In return for their years of service, lords gave the land to the peasants and the Lord's protection.
In many cases, a person could be both a vassal and a lord. Being a vassal to a more powerful lord and lord to a less powerful vassal below him. This established balance in society so one person could not hold all the power among the lords.