The Feudal System depends on dedicated layers of hierarchical support. I'm going to be very general here, as details may differ from one house to another but in general, they operate under similar lines.
When a noble is appointed to a position, his primary duty is administrative -He directs subordinates and subjects, collects taxes, delivers payment to superiors, takes a small portion for himself, and the Feudal machine keeps running. A noble may own a large portion of his assigned holding, or none of it, acting solely as an administrator.
A noble awarded control over a planet might be given sizable portions of land for personal use -From that land he derives the bulk of his personal income and pays his taxes. He also administers a layer of subordinate nobles, who control cities, continents, corporations, islands, etc., who in turn administer lesser nobles who control towns, counties, baronies, companies, etc., and they in turn administer petty nobles, who control villages, communities, farms, etc.
As in the Medieval era, a noble's primary duty was tax collector -The collections were needed to supply armies and support the lavish lifestyle of the ruling class.
In return as acting as tax collector, a noble's superior pledges to do what is in his power to protect his subordinates.
Another part of a noble's obligation is to maintain a military force for local defense and be able to raise a force in case a superior noble calls for it.
I'm currently running a campaign where one noble has been appointing officers in his unit as lesser lords in "pocket boroughs", for the sole purpose of padding parliamentary seats in his favor.
