I have gotten back into playing Mount and blade and things are going pretty well for me so far. I am in the Khergit Khanate and i have two castles and two villages. My dilemma is that the Khanate now is very powerful, they have all but destroyed Swadia and now we are cutting into Vaegir and the Sultanate. Since i plan on eventually forming my own kingdom i dont want the kahnate to be so powerful i dont have a chance; do you think i should defect to curtail their power, don't worry about it or just give up on my plans of world domination?
I suggest you build an army of Saranid Mamlukes. They are excellent detergents towards Kahnid Horse Archers, because of their extreme resilience and armored horses. Make up for the lack of ranged units with some horse archers of your own though. Once you have about 20 mamlukes, the Sarranid melee horsemen, (gonna take some time, but given that Swadia's gone (they're always first to kick the bucket) and you're cutting into Vaegir and Sarranid territory, 20 should do it), defect and try to conquer their southern-most castle (forgotten its name). This castle is in a narrow passage, and should make it easy enough to defend or flee from if necessary. Be careful when assaulting the castle though, as the Kahnid are very archer-oriented, making the ascent on top of the castle walls a rather interesting experience...
Get some lords on your side, preferably Kahnid, to support your cause, and make a stand at the castle should the Kahnid come at you in numbers.
It would be advisable to capture said castle after the majority of the Kahnid noyans and their Khan have just recently fought a major battle, and are low on troops.
Well, that's how I'd handle the situation. It's never too late to satiate your desire for World Domination in M&B:W. Ever.
Having a strong Khergits is not a problem in forming your own kingdom. What you should be doing now is to become very friendly with a subset of the Khergit lords. Thus, once you do declare your independence, you can go to each lord to convince them to join your cause. You can also cause their relationship to worsen with the king in the mean time, but this is iffy as the king might brand you a traitor and kick you out.
You don't need to worry. You can't die or loose experience or any enterprises/land you own in Mount and Blade so you will always be able to conquer the world, even if you have lost your castles and your army and had to start from scratch (well apart from the experience, equipment, enterprises etc.).
In addition to the above the Khanate will weaken itself as it gets larger. As it expands its lords will become more spread out and it will be harder for the marshal to gather them for a campaign. A few lords might join the Khanate from the factions it defeats but more will join the other remaining factions. Fiefs are not awarded with any geographic cohesion in mind so Khergit lords will end up holding fiefs at opposite ends of the map. This means they will spend all their time travelling between them and will be unable to defend them effectively.
In your situation I would suggest you stay as a Khergit lord and bide your time before defecting aggressively at the right moment.
You should be looking to:
Increase your right to rule
Increase your reputation with the Khergit lords (marry the daughter of a powerful lord with lots of male family members)
Increase your income, widen your income base and stockpile money. Remember that you won't receive income from enterprises in cities you are at war with.
Strengthen your garrisons with heavy infantry and decent archers
Improve your castles
Build a powerful field army (Swadian knights or Saranid mamelukes are good)
Have a surplus of troops in your castles so you can rapidly replenish your field army
This preparation should mean that you are able to withstand the onslaught when you eventually defect from the Khanate. When you are ready go and capture castles and towns (not from the Khergits), preferably close to your existing castles as this will make your fiefs easier to defend later. You want towns if possible because you get more revenue. Ask for these to be awarded to you and give them strong garrisons. You will probably be given the first couple of conquests but soon you will be told no and given the option to rebel. Do this, you will keep your existing properties, form your own kingdom and will instantly be at war with the Khanate. A period of heavy pressure will follow, hence the strong garrisons and army and the need to replenish your army rapidly, but you should be able to withstand this. Hopefully your good relations with the Khergit lords mean you can persuade some of them to join you. They will bring their fiefs with them. If you choose the right moment to rebel (i.e. when the Khanate has just had some major battles) you should even be able to take a few of the Khanate's castles and towns before they sue for peace.
If this doesn't appeal to your then you can peacefully renounce your lordship by speaking to the Khan. You could then go off and start your own kingdom. Either way you will end up at war with someone and preparation will be vital if you're going to succeed. I emphasise that there is no rush in doing all this. Take the time to prepare yourself properly.
Defect. Go to what were once Swadian Villages and recruit Swadians to turn into knights. Then go to Nord and get huscarls. Then start a campaign against Khergit troops. Since they already have 3 wars, they'll get hit from 3 flanks. You join in, you should have an easy time destroying the Khergit as long as you let the other teams deal damage. I advise that you hit Halmar first because that's the town that's farthest out if they haven't expanded in that direction against the Sarrinid and Rhodok
I will tell you how to win easily in this game, but be careful, it will become too easy... May not be as much fun.
There are two types of battles:
You need an army of knights. Only knights. Any other type of troops is a waste of space for this type of battle. A mixed army works better in real life, but not in this game. Swadian Knights are #1, Vaegirs and Sarranids come in close second. Assuming you are playing on "Easy" level (your troops receive 3/4 of damage), an army of 100 knights can take out an NPC army of 500 people. Next time someone messes with your faction - you will "handle" all of their lords by yourself and pretty quickly (but in small groups! be reasonable). Once their armies are destroyed by you, your faction will happily besiege and take their cities one by one.
You need an army of archers. Only archers. Vaegir Marksmen are #1. When the battle begins, line up your archers in front of the castle and let them take out as many defenders as they can. When your guys run out of arrows, retreat from battle. Begin the siege again and retreat again when the archers run out of arrows. You will be killing defenders much faster than they are being replenished. Very soon your archers will take the castle.
Note that the archers will be very weak in the field (against knights, etc). Avoid field battles when you are besieging fiefs.
If you think this tactic is cheating, here's the fairness twist: do not retreat when archers run out of arrows but tell them to charge instead. Most likely, the archers will die in melee, but the reinforcements will arrive and they will have arrows. Line up the reinforcements in front of the castle again and let them run out of arrows again, etc.