It's the british equivalent for a german word referring to a part-time soldier.

First up, let's look at the term. From Michael Hoffman's translation:

"On 11 August there was a black riding stallion loose outside Berles·au-bois, which a territorial was finally able to kill with three bullets."

(I can't find the Creighton translation to compare it and show if he used a different term.)

'Territorial' isn't a rank. The term 'territorial (soldier)' is a British one. It is a part-time, volunteer soldier. Not being a full-time, professional soldier, they tended (and tend to) be looked down by those full-time, professionals. Hence Junger's disparaging tone.

Now, let's have a look at the same test in the german:

"Am 11. 8. trieb sich im englischen Hintergelände vor dem Dorfe Berles-au-bois ein schwarzes Reitpferd herum, das von einem Landwehrmann mit drei Schuß zur Strecke gebracht wurde.”

"Landwehrmann" is the term translated as 'Territorial'.

In the German army at the time, a Landwehrmann was a type of soldier in the home militia. For us, the word 'militia' in English nowadays has connotations of unofficial military groups running around the forest to defend themselves against the government, but in the past it was a formal military force of part time soldiers. In British English, the audience for Hoffman's translation, the closest term is 'territorial (soldier)'.