It's not historical, see:
The whole Royal family works in two ways - the theoretical what they (or more usually the Queen) can do, and the way it actually works.
In theory the Queen can veto any law, could decide who to knight herself and so on but in reality this doesn't happen for the simple reason that the minute she did we the people would advance on Buckingham Palace with torches and pitchforks and burn the place to the ground. She is very much the Queen because the people and the government allow her to be, whatever the technicalities of the law say.
The reality of the situation is that the democratically elected government (sort of, see the House of Lords below) make all the decisions and the Queen merely "endorses them" (though even that suggests she has a say in it which she doesn't in any real way).
Do the Royal family have influence? Yes they do, but I'd suggest it's really no more than anyone else with that much money has (look at Adrian Beescroft right now) and they're far better than most with that much money in this sense as they're aware that they should remain neutral and do so. Generally the worst that happens is that Prince Charles runs his ill informed mouth about homoeopathy and architecture.
It's an odd system and no-one in their right mind would design one like it but as it operates now it's really not that broken.
If you want to take a swipe at something can I suggest the unelected House of Lords which has genuine power over the laws of the land and frequently uses it?
And even they tend to be a force for good, curbing the worst excesses of successive governments, though I may be more positively inclined towards them than I could otherwise be as I detest the current government so like that the Lords are giving them the run around.
How it actually works because people (or more specifically, parliament) don't feel like aligning theory and practice is not my problem.
If to the law there are more than one kinds of people then you may say that in theory it isn't like that however in practice this has all kinds of real effects and these will remain as long as Royalty is not formally abolished.
Knighthoods are one of those effects, another is the fact that people of 'royal blood' are to some extent above the law. And are protected in ways that no commoner would ever be protected.
On top of that it is still hereditary rule, you may be Knighted but your children will never accidentally be born King or Queen. And to me that is just plain wrong, ceremonial or not.
While I would prefer an apolitical president for Head of State of the UK, I feel that the Royals do deserve some credit for their hard work and willingness to put themselves in harms way in the Armed Forces.
The difference between how it works in theory and how it works in practice is everything. British law is largely unwritten - until the EU gave us them we had no written bill of rights and most of our laws are based on precedent rather than anything parliament has decreed. If you do the immigration test one of the things you might be asked is what sort of constitution Britain has (correct answer "an unwritten one"). To try and understand Britain based on what is theoretically true is an exercise in futility that will rapidly lead you away from anything resembling reality.
I don't know if you have to live here to really understand it but what you imply simply doesn't tally with the way the Royal family are viewed. It's a strange combination of soap opera, duty, alien otherness and sentimental fondness. For most people there's more of a feeling of pity for them than any idea that they're better than us. They are an anachronistic anomaly but that's how they're viewed - so different, so outside that the comparisons you make really aren't there, any more than you'd compare yourself to something in a museum.
Now that's obviously not true of everything to do with the class system which at it's top levels embodies almost everything you say (the Prime Minister for instance is to me far worse, an elitist fop with none of the Royal family's sense of duty or propriety) but to pick on the Royal family is a little like protesting against BP by not buying sweets in their garages when you're filling up your car with petrol - it's really not the problem.
Yeah, because countries following "the modern theory" are doing so much better than countries with a Royalty.
In practice, it makes no significant difference, governments can and do have lavish expenses and luxury. So it's not like not having a monarchy is saving them any significant amount of money
"another is the fact that people of 'royal blood' are to some extent above the law. And are protected in ways that no commoner would ever be protected."
Oh you mean like diplomats or a president? I'm sure the POTUS is the most protected human being on the planet way more than any king or queen
"On top of that it is still hereditary rule, you may be Knighted but your children will never accidentally be born King or Queen"
Knighthood is not hereditary and even you're "royal blood" tough chance being born King or Queen (if not altogether impossible, but I'm not sure about that)
If you are looking for elitism in the British system then you are missing the point when you pick on the Royals. They are probably one of the better investments the government makes in boosting the tourism sector. As your comments demonstrate, lots of people around the world take them very seriously, a lot more seriously than British people typically do.
President Cameron.
Shiver...
In theory they are completely wrong, in practice I only see them doing good things.
Nobody argues that juries should be elected, or selected by the police.
Heredity as it is (or rather was) favours white, male (many of the titles couldn't be passed to women), upper class, privately educated, wealthy, christian individuals.
http://www.publications.parliament.uk/pa/jt201012/jtselect/j...
I don't know that hereditary peerage is a good idea, but I'm pretty certain that an elected peerage would be worse.
Interestingly, I have never seen anyone theorize about this. Everyone understands why democracy and elections are related. Parliament is a snapshot of public opinion at a given time. By using two snapshots taken at different time intervals, you get better reliability. Sounds obvious to IT engineers :-)