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Most of Rome’s leading families stayed loyal to the reform popes, but three took the German side of the squabble. In 1075 a spat grew up between one
of the pope’s officials and a member of one of these families, Cencio di Stefano.

I'm not sure the meaning of 'the squabble' in the above. Does it mean German side that were in feud?

Thanks for your help!

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I suggest the word 'dispute'.

A feud refers more to long-running trouble between families or tribes, often for generations.