In the High Middle Ages, the feudal system worked like this. A great and powerful lord loaned to one of his noble followers a tract of land to plant and to use. The follower, or vassal, had to pay for the use of the land by furnishing fighting men when his lord needed them. He promised loyalty by kneeling and placing his hands between those of the lord. The vassal's chief service was to fight for his lord, but in peacetime he owed other services. Usually he attended his lord's court for a certain time each year. And he had to make a gift of money on special occasions such as the marriage of the lord's oldest daughter, or the coming of age of the lord's oldest son.
Almost every lord was a vassal, and almost every vassal was a lord. There was only one person in the entire nation who was not under a lord: the king or queen. But even the king or queen did not have absolute authority; rather, he or she had to negotiate with lords, or barons, of the nation. This prevented the despotic imperialism of Roman Empire from returning, and prevented the absolutism of later ages from starting. Most vassals were also lords: as they had pledged to help their lord, so their vassals had pledged to help them. Only the serfs had no vassals below them:
Even the greatest lords were vassals of the king, who was in theory the owner of all the land in the kingdom. The whole system was supposed to be an elaborate network leading to the king. But in practice, the king was very often at the mercy of his powerful vassals, who had their own armies an courts to compete with his.
To maximize freedom, it was necessary that the king or queen not be high above everyone else in the society; otherwise, the royal ruler would be tempted into autocracy. The existence of powerful nobles provided a sort of check and balance, or a division of powers.
A vassal inherited his his right to use land from his father, and in turn he passed it on to his oldest son. In time, noble families forgot that their land had originally been loaned to them by their lord. They held control over their enormous holdings and administered them as their own.
Naturally, most of the economy revolved around agriculture. Although there were trades, like working with wood and metal, and even banking systems, most people were involved in farming. Most of the farming was done by serfs:
The main duty of a serf was to help his fellows take care of the noble's broad fields. In addition, nobles allowed their serfs little strips of land to plant for themselves. On this they raised food for themselves and their families, and perhaps a little extra to sell.
Although serfs were economically dependent upon, and bound to, their lords, the ability to raise extra crops to sell provided a measure of autonomy; the ability to raise crops to feed their families provided a measure of motivation. This prevented Medieval Europe from facing some of the agricultural problems which had faced the Roman Empire.