The main economic system that dominated Europe in the Middle Ages was feudalism. This hierarchical system revolved around land ownership and obligations between lords and vassals. Lords owned large estates and granted portions of land (fiefs) to vassals in exchange for military service and loyalty. Peasants, or serfs, worked the land and provided agricultural produce, offering labor in return for protection. This system structured society and economics, fostering localism since trade and commerce were limited due to the lack of centralized authority and safety. Feudalism influenced political power, social classes, and economic arrangements in medieval Europe.