Being the marshall gives you the power to give orders and organize military campaigns. You will also have full authority over your allies in battle, so you may instruct their troops just as you would your own.
To give orders to your fellow lords (including the monarch), just speak with them and select "I have a new task for you." A list of orders will then be shown.
If you wish to head a military campaign, talk to any vassal and tell them "I want to start a new campaign. Let us assemble the army here." This will send out a message to all the vassals with instruction to meet you at that location.
To cancel orders, tell the lord "I won't need you for some time. You are free to do as you like."
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It is important to note that vassals will not always obey you. When given a direct order, if they are preoccupied with something else already (like heading to their castle), they may tell you they are too busy.
If they are not busy, they must listen to you, but may only do so for a limited length of time. This means that if you instruct a fellow lord to follow you and then besiege a castle, he may wander off before you even finish constructing the siege equipment. All lords, even ones that like you, will also be tempted to chase passing caravans or enemy farmers as well.
If you are not playing with realistic saving, you should save before starting the siege so that if all your allies run off, you can restore and try again. It is advisable to tell all your comrades to follow you again just before starting the siege, this will decrease the likelihood of them losing interest before the actual battle begins.
Calling together a military campaign can be even more frustrating, as it can take a long time for everyone to come together and the lords may ignore your summons completely too. It may be faster to just manually give three or four lords direct orders to follow you rather than attempt starting a campaign.
As Marshall: Any loss, such as having a village raided, caravan destroyed, peasants attacked, a lord losing a battle, a castle captured, or town captured will add to controversy in often large measures. If you face war on multiple fronts or have a large kingdom to defend, you can expect to reach near 100 controversy very quickly. The only solution is to give up being marshall in that case.
Best Answer
I don't know about the the diplomacy mod, but the only way I know of to make peace between two members of the same faction is done by talking to your spouse and asking if there's anything to improve your standing in the kingdom. Every once in a while, they'll offer a mission where you can go make peace between two lords in your kingdom (hopefully one of them will be the king).
Another indirect way of improving relations is getting your king to grant that vassal a fief. You can lend your weight behind a lord by talking to them and choosing the option of supporting them in their claim to some fief. If the king does grant them the land I'd imagine that their relationships will improve. Keep in mind, however, that this will alienate the opposing faction. Politics in Caldera is very murky and unsatisfactory.