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The Knights of the Order in Arnum, however, I assumed would have functioned almost like a mercenary force employed by the Guardian of Casadia, although not paid, just something they did to assist the government of Casadia/show that the Östron community the Casadians had annexed (I say lore wise that Arnum "existed" for some time before I built it) that they were loyal and willing to serve alongside Casadians.
That is pretty much how I considered it to be as well. The Knights were a separate unit from the local Istrateri, but still served under the command of the Guardian of Östea.
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Obviously the Knights no longer exist, so where do they get integrated as more highly trained members of the military capabilities of Arnum?
The role of the former Knights within Casadia is unlikely to change much, though their official title will change to the Knights of Arnum/Ernun. While the Knights of the Order have been disbanded, Casadia recognizes the cultural pride taken in the Knights among the Östron community and thus will allow them to continue to exist in a similar capacity as before. They will be able to maintain their original command structure, composition, and other quirks, while still serving under the command of the Guardian of Östea. Given their official independence from the Order, they will likely be offered increased funding and support from the Guardian.