The Imperium and the duchies regulate anything with interstellar ramifications. Justice, foreign relations, colonization, trading standards, shipping, money (the Imperial credit), Imperial starports, conservation, information and communication, Scout Service, technology, and, as you said, defense.
They're [nobles] a fail-safe. They have the authority to step in and supercede the Imperial Bureaucracy if it proves corrupt or unable to cope. They're a sort of ombudsmen. Except dukes who are much more than that.
Imperial high nobles do not necessarily control any of the forces of "their" world.
Well there's the thing. Nobles always felt quite central to Traveller but if the system governments deal with everything within their system and the Dukes do most of the interstellar stuff then that doesn't leave anything interesting.
So plan B.
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Mostly thinking aloud here but one option might be to view the nobility in two layers.
If anyone has played the old "Kingmaker" game they might remember how the individual nobles had a personal strength on their card but could also get a title like "Earl of Sussex" or "Warden of the Cinque ports" that came with an added strength of 30 or a couple of ships or something.
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So the 1st layer of nobility could be a military caste heavily connected to the IN (and/or Imperial civil service) but whose hereditary status is separate from any current role in the Imperial structure.
(Maybe a bit like the Samurai or Roman Equite class.)
http://en.wikipedia.org/wiki/Samurai
So for example an ancestor reached a certain rank in the IN and was knighted gaining some hereditary privileges from the Emperor like these
There is an expanded article by David Billinghurst in an old Into the Deep Fanzine (Issue #2, p.18) that is based on Robe and Blaster. It can be found at:
https://sites.google.com/site/reaversdeep/file-cabinet
thus encouraging loyalty to the Imperium and a long line of descendants traditionally enlisting in the Imperial navy (or civil service maybe) and gaining some preferential treatment therein.
Part of the privileges would be economic as the aim is to create a loyal caste but it wouldn't necessarily be land in this era e.g. a knight's fief might be a 0.001% share in a star port's revenues.
I'd say one automatic military privilege might be the right to bear arms and at higher ranks maybe the right to a certain number of huscarles.
These rights and privileges would be based on their *personal* status rather than their current Imperial titular status.
So for example a hereditary Knight from Roup (not "of" Roup) might have as his family privileges: right to bear arms, six huscarls, an estate on Roup and a knight's fee of 0.001% of the Roup star port's revenues
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The second layer could be appointed titles on a similar vein to those in Kingmaker e.g. Baron-Ambassador to Jenghe.
So for example our hereditary knight from Roup might be appointed as the Baron-Ambassador Jenghe i.e. the Emperor's ambassador/representative on Jenghe with additional privileges based on the title not the person e.g an Imperial baronial yacht, escort ship and a company of marines. If the person holding the title is switched the forces that come with the title switch also.
(This could possibly square away the difference between huscarls and other forces - the huscarls are personal and the rest come with the title.)
Although these titles might require the holder to be a hereditary noble that wouldn't necessarily be enough on its own. They could also require competence for the task so the titles might (officially at least) only be granted to nobles who were also an admiral or captain or high up in the civil service.
So a (non dilettante) noble career might be five terms in the navy followed by a sequence of four year terms as an Imperial noble i.e. someone who also holds an Imperial title as say Baron-Ambassador of Jenghe or Count-Commander of the Deneb Scout Service or something.
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I'm quite liking that - not sure how Dukes fit in. It's a bit more like the Age of Sail thing of naval officers becoming governors and then getting ennobled as a kind of hereditary pension.