In my own homespun vision of an Empire (from
here):
How does a Space Empire Work?
Here I present an Empire which is somewhat different from the default Traveller Imperium, though also somewhat similar in spirit. Whether this is an alien Empire or a Terran Empire, my basic idea for them is the same. The idea is this: An Empire of Zaibatsus. The Empire is ruled by the Major Houses, as well as Minor Houses; each House is a massive, family-owned, semi-monopolist megacorp, similar to the Zaibatsus of Imperial Japan, though with even bigger political clout. Eventually, these Houses - initially mercantile and industrial combines - have ossified themselves into the very political fabric of the Empire, with various fancy titles of nobility foisted on their controlling, old-money families, and a pseudo-feudal mystique and culture surrounding them. But, at the most basic level, the Empire is not feudal per se - it is not ruled by a class of land-owners - but rather more like a highly monopolized market economy.
So each House is essentially a corporation, with a single extended family controlling it. Each House owns a very wide variety of subsidiaries, industries and outlets, and also has the right to govern planets, subsectors or even sectors. When communications are limited to the speed of travel and the speed of travel is, at most, 6 parsecs per week, it means that planetary business, even when owned by an interstellar corporation, must run itself almost independently. So how does the controlling family make sure that all its interstellar holdings are run in its interest? By appointing relatives, or, at least, members of long-time allied families (i.e. retainers) to run businesses, planets and subsectors. It's all in the family, you see.
My Empire is 9 Sectors in size (3x3), with each of the 8 peripheral Sectors controlled by one Major House, and the central Sector controlled by the biggest and richest of the Houses, the Imperial Family. Major Houses have much autonomy in how they run their Sectors, and are relatively self-sufficient, at least in basic goods. Inter-sector trade is in luxuries, high-tech items, rare earths and other things which the local industrial World or Asteroid Belt couldn't simply produce.
Minor Houses own smaller businesses, typically on the Subsector level; some are independent and provide services which the Major Houses do not see profitable enough to monopolize; others are, in essence, independent subsidiaries ("vassals") of Major Houses. Free Traders also have their place, as highly ossified monopolies cannot always cater to each and every need of multiple disparate planets, so these holes in the system are plugged by independents, as well as smugglers, who, as small companies, are much more flexible in their response to the market.
Each House has its own military, and is expected to take care of its Sector's defenses on its own. The Emperor also owns several high-tech Legions and Imperial Fleets, whom he uses to keep the Houses in line, as well as take care of emergencies that the local Houses cannot deal with (such as major invasions or massive rebellions). These are mostly kept in the Core, though some squadrons patrol the Periphery to show the flag and remind the Houses who is in charge. But usually the ones to face the initial thrust of foreign invasions and rebellions are House troops, with the Imperial forces intervening only as the last resort.
While each planet in the Empire is ruled by a member of a House (i.e. a noble), the actual government, and thus the Traveller government code, varies, as not all nobles rule in the same way. The ideal (from the Imperial viewpoint, that is) planetary administration is Traveller Government 5 (Feudal Technocracy), but some rulers take a more direct hand (Govs A-B) or let their servants run things for them (Govs 8-9); sometimes the world is split between several Houses (Gov 7), sometimes the ruling family runs things rather than a proper Zaibatsu subsidiary (Gov 3) and sometimes (rarely) the ruler steps back and, as long as the taxes are flowing, lets the local run their own lives (Govs 2 and 4).
