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Gerald and Caillen's relationship is potentially confusing, but I'm not sure of a good way to unconfuse it without having anyone break character (since I generally don't use narration/explanation captions in Kismet). Hence, footnotes!
Gerald is biologically Caillen's uncle. However, on Tertia, blood relationships have no legal standing (and theoretically, no social standing either, although theory lags significantly behind actual practice). So, Gerald legally adopted Caillen, and Caillen is thus considered Gerald's son. Gerald is also one of the most powerful men on Tertia, and Caillen has spent his whole life dealing with accusations of nepotism, so the two of them remain formal in public. In private, they lapse into using each other's personal names rather than ranks. (I'd considered having Caillen call Gerald "dad", which would be more socially correct, but that was even worse as far as potentially confusing readers, so I figured it was reasonable to go ahead and have him call Gerald "uncle" as long as there's no one else around. Caillen is aware of his actual, biological relationship to Gerald, after all.)
Normally, children on Tertia are raised in creches -- communal nurseries -- until around the age of four or five, and then adopted out to their permanent parents. Gerald pulled rank and bypassed the creche system. At the time he did it, 30 years ago, this was somewhat easier to do, because it was just getting established and was still pretty controversial. (Well, it's not uncontroversial even now, so perhaps I should say it was even more so.)
There will be a later scene in Sun-Cutter that explains the creche system a little better, but basically it was put into place in a well-meant, if stupidly dystopic, attempt to flatten out social divisions in Tertian society -- especially between Tertians and Secubans, but also ancestral divisions based on race, religion, etc. Supposedly, the children in the creches are completely randomized and no one (at least, none of the adoptive parents) knows who their birth parents were. In practice, of course, people shortcut and game the system in various ways (like Gerald did). And children are given a battery of standardized tests -- physical and intellectual -- and the test scores made available to prospective parents, so in practice, Tertia is in the process of putting a pretty effective testing-based caste system into effect.
Although the creche system is still contentious in some areas (especially on Secuba), there is now an entire generation of adults -- like Elke, the red-haired soldier in the last few pages -- who grew up in a creche and then with adoptive parents, and are well-adjusted and healthy. For most of the younger generation of Tertians, it's becoming normalized.
But it involves forced erasure of identity -- Secubans object (with good reason) that it's a form of genocide, an attempt to completely erase their culture and assimilate the next generation of Secuban children into Tertian society. The older generation of Tertians are still struggling to come to terms with it themselves. It doesn't help that, as part of the series of Tertian "reforms" that grew out of their civil war with Secuba and culminated in the creche system, religion (of any kind) is outright banned on Tertia, and it's illegal to openly acknowledge differences of race or ethnicity. Basically, Tertians (and Secubans), as individuals, are losing their history and identity, having it forcibly replaced with a common Tertian national history and identity, with loyalty to the "motherworld" replacing loyalty to family, religion, etc.