When you right click a holding and click ' create new vassal'. Graduating to a higher title (Count to Duke) is usually the most reliable way to raise your demesne limit. If you are a count at your demesne limit, your next priority should be to become the Duke (or it's equivalent Petty King) of Brittany. If you were to type 'destroy_settlement b_ostia', for example, it would remove the Ostia holding from Rome, leaving an empty holding slot. If it's not an Ironman game, there's a console command to destroy a holding. Eg: Only Bishops can rule Churches, if you grant ownership of a Church to a Mayor, it's the wrong holding.
My understanding is that it means that the ruler's title does not correspond to the title of the holding. Get a writing assignment done or a free consulting with
