Laws and Customs
Lords have judicial power over cases that occur on their lands. A lord will hear petitions at his local castle-court, sit in judgment at trials, and pass sentence based on the evidence. In theory, justice derives from the authority of the King of the Andals and the First Men, Lord of the Seven Kingdoms and Protector of the Realm, who sits on the Iron Throne in the capital city of King's Landing. The King's power is delegated out to other great lords of the realm. This extends in a hierarchy from the king, to the rulers of the Great Houses (such as House Lannister), to major Houses (such as House Tarth), to minor Houses (such as House Cassel).
The King's Peace is supposed to extend over the whole realm, and though small scale feuds or succession wars happen now and again, the constant wars between the independent Seven Kingdoms were put to an end when they were unified in the Targaryen Conquest three hundred years ago. The King's peace also extends to protection from outlaws and pirates. The Targaryen Conquest specifically forced the ironborn to abandon their Old Way of preying on the commercial shipping of Westeros itself (though it is tacitly acknowledged that they instead raid the shipping and shores of other lands in Essos for plunder).
The Seven Kingdoms do have a “Master of Laws”, suggesting some sort of statutory written laws exist, but their legal system still appears to be primarily based on customary laws, prior precedent, and the wisdom of the lord presiding over a decision.
Individual lords are supposed to enforce the laws and carry out punishment on their own lands. Only the major cities (and possibly a few of the large towns) have dedicated “police forces”, such as the City Watch of King's Landing.
Gaining the title of knighthood does not make a man a lord, though many lords become knights. Knighthood is a middle-step between noble-born lords and commoners. A commoner can be knighted for valorous service in battle, but the title is not hereditary. A commoner who is knighted usually starts out as a “hedge knight”, a poor freelance knight not bound in allegiance to a specific lord (considered to be so poor that they sleep under hedges by the roadside while searching for employment). The next step up for a prospective knight is to become a “sworn sword”, sworn to the service of a particular lord. Beyond this step, a sworn sword may become a “landed knight” if his lord rewards him with land for his service, typically a smallholding, large farm or small manor with servants. Successful landed knights who expand their holdings or continue to perform exemplary service for their liege may be raised to the rank of "Lord" in time, leading a minor noble House. Sometimes a knight may skip some of these steps, and while rare it is not unheard of for a lord to reward a commoner for valorous service by granting him both land and the title of knighthood, as when Stannis Baratheon rewarded Davos Seaworth for his rescue of the garrison during the Siege of Storm's End.
The difference between a “landed knight” and a “minor lord” is often very subtle, as some landed knights may actually be wealthier and more powerful than minor lords whose families have fallen on hard times. However, the vital distinction is that only a “lord” legally possesses the power of justice, which a landed knight does not. For example, House Clegane is a House of landed knights in service of House Lannister, but it is not a lordly House. Thus the head of the House, Gregor Clegane, does not possess the legal right to hear trials and pass judgment.
