Sounds like, as Machiavelli said, it is better to be feared than loved.

However, perhaps Chivalry will act like the old MTW virtue of Loyalty on the Camp map and affect Morale on the Battle Map. Conversely, Dread could do what it did in MTW (suppress rebelliousness in the populace) and could weaken the moral of the enemy on the Battle Map. It's not clear from the FAQ.