Initially the demesne lands were worked on the lord's behalf by villeins or by serfs, in fulfillment of their feudal obligations. As a money economy returned, region by region, in the later Middle Ages, the serfs' corvée came to be commuted to money payments. With the advent of the Early modern period, demesne lands came to be cultivated by paid laborers. Eventually many of the demesne lands were leased out either on a perpetual (i.e. hereditary) or a temporary, renewable basis so that many peasants functioned virtually as free proprietors after having paid their fixed rents. In times of inflation or debasement of coinage, the rent might come to represent a pittance, reducing the feudal aristocrat to poverty among a prosperous gentry. Demesne lands that were leased out for a term of years remained demesne lands, though no longer in the occupation of the lord of the manor (see, for example, Musgrave v Inclosure Commissioners (1874) LR 9 QB 162, a case in which the three judges of the Queen's Bench Divisional Court and everyone else concerned assumed without argument that farms which were let by the lord of the manor were part of the lord’s demesne land).
This system of manorial land tenure was conceived in Western Europe, initially in France but exported to areas affected by Norman expansion during the Middle Ages, for example the Kingdoms of Sicily, Scotland, Jerusalem, and England.
In English Common Law the term ancient demesne, sometimes shortened to demesne, referred to those lands that were held by the Crown at the time of the Domesday Book. The term demesne also referred to the demesne of the Crown, or royal demesne, which consisted of those lands reserved for the Crown at the time of the original distribution of landed property. The royal demesne could be increased, for example, as a result of forfeiture. Demesne lands were managed by stewards of the Crown and were not given out in fief. During the reign of George III, Parliament appropriated the royal demesne, in exchange for a fixed annual sum, called the Civil List.
As common-law practice protected the rights of the villein, tenancy at the pleasure of the lord gradually developed into the added security of copyhold leases.
Since the demesne surrounded the principal seat of the lord, it came to be loosely used of any proprietary territory: "the works of Shakespeare are this scholar's demesne."