Quote Originally Posted by Ituralde
...settlemenst were supposed to be allocated upon conquest.
Not necessarily - conquest is when they fall into the Emperor's lap, but he does not need to get rid of them immediately. The main effect of allocating settlements to Houses is to allow the creation of Counts, but as Franconia has no avatars who could become Counts (Dietrich is already a Duke or equivalent), that's not a pressing matter for her.