Feudalism was a system completely established in most of Europe during the High Middle Ages.
In short, the lord, who was very wealthy and had enormous patches of land, gave some of his territory (fief) to a knight or noble who appointed peasants to work on the land. The workers themselves were fed and paid by the knight who in turn sold the land production to traders. The lord had an additional benefit: the knight was required to help him in times of war. The lord himself had to pay tribute to the king and fight for him if needed. This way, most kingdoms gained a strong economical boost, as well as a military one.
This was especially useful during the Viking Raids as Feudalism was the foundation of knighthood which consisted of very skilled warriors. When The Moors fought Charles Martel at the Battle of Tours, he greatly benefited from the system which he himself helped establish.
Feudalism was especially powerful at the end of the High Middle Ages, but during the XIII century it began its inevitable and slow decline. The main reason is that lords didn't possess as much territory as before and gold was more established that in the past. Therefore, knights and mercenaries geared toward the new economy: gold.