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As Stella says, the 'aristocrats' - ie those with inherited titles - vary from a few super-rich (typically those whose families owned land on the edge of London when it expanded as Britain became the richest country), to those who may just own an average-to-nice house somewhere in the country, effectively a family farm. They live far more in rural areas than urban, so most of us don't actually come across them in our lives (I knew one, at university, and he was a bit of an arsehole, but more because he was a pretentious, but not very good, actor, rather than throwing his title around - it was someone else who told me he was Lord someone).
They're more fodder for gossip columns, as are rich familes who don't have titles. Many can be a waste of space, like Paris Hilton. If they behave themselves, they do stand a chance of getting 'respect' from some people - the Queen does this well, but a few dukes manage it as well, and you get occasional TV programmes looking at their life running a stately home in an uncritical tone.
Most people that you see in the news with titles have been awarded them, rather than inheriting them - such as Baroness Thatcher, as Staph points out below. The honours system has a lot of critics - political parties can nominate a certain number for knighthoods (just a title), or peerages (ie making them Lord/Lady/Baroness etc.) - which gives them a seat in the House of Lords for life, and a chance to vote on legislation (though the House of Lords can only delay legislation, not block it forever). There's a current scandal about people making secret loans to parties in return for these honours - which is illegal, if it happened. There's an outside chance this is what will bring Blair down. Some get it for excellence in their field (eg Lord Winston, a leading medical expert in fertility ), or charity work (eg Lord (Richard) Attenborough, who got it not for his acting or directing, but his work with a mentally handicapped charity over the decades). Most get it as a semi-retirement gift after being a politician. There are also 'lesser' honours (eg CBE, MBE) which go to actors, athletes, businessmen, head teachers, local council leaders, and all kinds. It does make for a 'pecking order' in public life, to a certain extent, and many would like to get rid of it all - but they find it useful to give out an honour as a sop to someone who didn't get real promotion in politics, and there's a certain amount of giving honours to popular people (eg sportsmen) which can give some a sense of getting 'their' favourite recognised.
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