It doesn’t. Hence why the strength of the monarchy declined after the dragons died, and why there was such relish when it looked like the Tyrells and Lannisters had won the War of Five Kings, because civil wars free up lands from the losers.
If land is divided up among the nobles, and the nobles in Westeros have been around for 1000s of years before Aegon I, then how does the crown today give anyone land without taking it from someone else?
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