Most hobbit affairs were handled by individual families and I suppose that things affecting more than one family would be settled by the head of the most important family in that area, like the Lord of the Manor in mediaeval England.
The Westmarch was a new settlement. It didn't have an established hierachy to control it. Someone had to be appointed to arbitrate between the families in this new colony. Sam's son-in-law was one of the first hobbits to move in and had the right connections to get the job.
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