Back in the first chapter, Gracie was referenced to as Duchess Lancaster, so unless there is some mistake in translation it seems that she can and will inherit her family's title. Hopefully this is addressed in the next chapter.
@Fuminino From a legal point of view the empire did not commit a war crime (all people in the city were 'de jure' enemy combatants.) but the rebels did (by executing P.O.W.'s).