In most cases the very idea of monarchies originated from prehistorical tribal leaderships and tribal nobility. Nice example of this are monarchies in medieval Europe. "Barbarian" tribes that toppled Rome were all organized like that, with rulers like kings and so on. In other cases, monarchs may come from clergy (Mesopotamian city-states etc.). I wouldn't say a family just decided something like that. They had to build their power base for generations, gaining influence etc. Regarding subjects - different monarchies work quite differently. Many of the ancient monarchies didn't have a feudal-like system that I believe you're referring to here.