This palace is a branch of the royal family. The emperor's son can set up a palace when he is an adult, but the palace number is given by the emperor. For example, the existing palaces include Qiuxiao Palace and Dongfang Palace, and some of them follow this royal system. This system has a very long history, which originated from the Kamakura era in the12nd century. In fact, in popular terms, it is actually separation, but in Japanese history, there is no female palace.
The old palace family is basically the son of the last emperor, but it has been too long, and it is already a distant relative in today's world, so it cannot be included in the royal family (the royal family needs to be a direct line in today's world). Therefore, many people hope to marry the imperial daughter and restore their royal status.