If we assume that this is the official stance, the economic strength of a single village stems from the collected taxes and the military strength comes from the dozens who can be mobilized in a knight peerage. Such a territory can be compared to a small country in regards to its economic strength, but the earls and dukes at the border, which can mobilize over 10’000 soldiers, are in no way the same situation though.
This might be part of the real intention.