Developing the Realms question on urban settlements and a ruler's personal domain

I'm looking at the example from ACKS on page 231 for Lazar's realm.The total population is 600,000 peasant families. Lazar's personal domain at that size would be 12,500 families leaving 587,500 families to be divided equaly among his 5 vassals to the tune of 117,500 families each. The largest urbran settlement has 12,000 urban families. My question is, are those 12,000 urban families part of the 12,500 families Lazar has as part of his personal domain, leaving the reamaining 500 families as rural? Or, are those 12,000 urban families in addition to the 12,500 peasant familes Lazar has as a personal domain.

If the former it looks like rulers would typically hold on to their major urban settlements, but not hold much land outside of that. I can see that as plausible. At some points of history the King of England was probably very involved with the workings of London, but didn't really want to mess with a few random hamlets.

Alternatively, if the the urban settlement is in addition to the lord's personal domain that leaves him with more land with which he can set up castles throughout his greater realm. I thinking the equivalent could be a king of England who maintained personal domains/strongholds in Wales, Cornwall, Northumbria, etc. under the management of a sheriff or constable intead of a baron.

Peasant families generally refers to domains, while urban families refers to settlements. When a ruler has a domain of 12,500 peasant families, that represents his landholdings, not his urban settlement.

Typically, the higher-tier a noble is, the more valuable his urban settlements are relative to his domains. The reasons for this are:
1) Urban settlements earn less per-family than domains, BUT
2) Urban settlements can grow to infinite size

The very most a ruler can control (a full 24-mile hex of 16 6-mile hexes all Civilized) yields 12,500 peasant families. But Rome would have 200,000 urban families.  So the relative balance is going to depend on how urbanized your setting is, and who rules the big cities. Hope that helps!

Thank you for the clarification. My initial take on the text was that the urban settlement population was included domain population. With this clarification I think it'll be easier to model the realm I'm working on.

On a different note, do you think there would be value in giving the ruler the option of allowing the urban settlement to be a free city similar to how a ruler can allow his peasant families to be freeholders? Urban families are already free (they're not serfs tied for the land), but could allowing a city more political independence should there be some impact? Could this already be modeled by essentially allowing the city a kind of "local senate" adapting the senate rules from Axioms?