The territory of each land consists of multiple hexes where vassals can build walls and other defensive structures. The more territories a vassal possesses, the more units they can produce. However, a larger territory also presents challenges in terms of monitoring and managing it effectively.
A landlord has a fortress in the center of his land, he cannot seize territories from his vassals - technically all these lands belong to him, but he can improve his fortress to protect himself from attacks by his own vassals in case of troubled times. As well as to defend against attacks by other landlords.