Why did the First World War, and Second World War take place on Earth? (I mean our real Earth... not the shinobi world)
Why don't we fight now?
I guess you know the answer.
Coming back to the shinobi world:
There was a hunger for power and wealth OR just difference in opinion. It took lots of time for people to understand the consequences and impact of war on civilization. They came to a good understanding. Though there are still misconceptions and differences in opinion between two random villages leading to minor fights, they aren't extreme.
We could see that when the allied shinobi force was formed and till Gaara addressed them all, most of the shinobis from different villages weren't happy to be with each other.
Hashirama in recent manga chapters has been explaining 'what is a village' and 'what are the shinobis', including the history of Konoha.
And Controversial Statement: :P
Even if feudal lords existed at that time, they would have been like the League of Nations or the UN, who might or might not have been able to stop them.