Would it be safe to assume that Houses were large families (the minor Houses), and the Great Houses began as minor Houses but have since expanded by adopting other families and gaining political foothold due to their size and influence? Also, is it known whether Nerevar founded Indoril, or was merely the leader at the time? If he was just the leader, it would explain why he uses the name "Indoril" in front of his given name, similar to important members of Hlaalu (Hlaalu Helseth etc). The usage of a house's name in one's own name would also explain Sotha Sil. Perhaps he was merely "Sil" before his importance as a member of House Sotha.

By that assumption, Voryn could have founded his House, his name being "Voryn Dagoth" as opposed to "Dagoth Voryn".

I don't know much about the Chimeri political structure, so could someone offer any answers to these questions, and perhaps some texts explaining a bit about First Era Great Houses?

Q1) I'd say so.
Q2) Indoril Nerevar was not the founder, just a member.
Q rest) I don't think it matters where you place the house name in ones name.
Q after rest) The Chimer political structure is pretty much the political structure in modern Morrowind, the great houses control most of Morrowind through their territory, Nerevar was a war leader to lead the houses in times of conflict, and there were ashlanders. The biggest difference is the absence of The Temple.

You are awesome. Seriously, every question I ask here is answered fantastically by you. Thanks.

So that would mean Voryn wasn't the founder of Dagoth either, right? Or at least, he may have been. And that also leaves the possibility that Sotha Sil's name was once "Sil"?

Nah, he's just the quickest.

It's a Given-Name, Family-Name thing. I'm a bit uncertain where they go because it does seem to change somewhat (Eno Hlaalu, Hlaalu Helseth). But, regardless Sil is the given name and Sotha is the house/family name. Great Houses encompass several families, though there is evidence that minor family members can change allegiances.

What's interesting to note is that Telvanni as a family-name is gone and it is only used to refer to the Political Entity. Likely it's members were all killed to make way for the next power-grab.

How it seems to work is that certain House Dunmer (high-ranking ones, at least) will sometimes put their House names in front of their ordinary names. For instance, the previous King of Morrowind was Hlaalu Athyn Llethan (i.e. Athyn Llethan of House Hlaalu). Helseth is called 'Hlaalu Helseth' because he belongs to House Hlaalu, and Helseth is his given name (he and Barenziah don't appear to have a family name). Other people just happen to have Hlaalu as a surname, even if they don't belong to the House. Nerevar is sometimes referred to as 'Nerevar Indoril' and other times as 'Indoril Nerevar', so it may be that Indoril was his family name as well as his House name.

As the OP said, we can probably assume that the Great Houses started out as powerful families, and grew into large clans containing several families each. Some of the founding families may have died out over time, which would explain why we don't see anyone with 'Telvanni' or 'Redoran' as a surname.

Those with House names last belong to the actual Hlaalu bloodline, not just the Great House. There seem to be several family/clan/house names behind important Dunmer, as Symmachus identifies Tharn as a possible descendant of the Ra'athim family, of clan Mora, of house Hlaalu. I seem to recall Helseth and Barenziah as being Ra'athim, as well, though I don't know my source (a.k.a. I could be making this up). So his full name is Hlaalu Helseth Ra'athim. Nerevar was of Mora as well (formally styled Serjo Indoril Nerevar Mora) .

From http://www.imperial-library.info/content/interviews-3-booksellers

Is there any evidence for this in the game itself? Personally I'm not inclined to trust developer interviews, as they're often so different from what we actually see in the games (heck, even the in-game lore is often contradictory). I realise not everyone agrees with me on this, however. I do know that Dagoth Ur specifically refers to Nerevar as http://www.uesp.net/wiki/Morrowind:Message_from_Dagoth_Ur in-game - and if anyone ought to know Nerevar's real name, it's him.

Sotha Sil was the last surviving member of the minor house Sil, but he was also a member of great house Telvanni.EDIT I think Barenziah may have been born into house Indoril.

House Sotha, you mean. I vaguely remember seeing that somewhere too. That would mean House Sotha was under the umbrella of Great House Telvanni.

House Sotha was a minor House. Its base of operations was Ald Sotha, which appears to be a Daedric ruin. They were all destroyed. Apparently he was the last surviving member.

Yeah, but we're saying that because it was a minor house, it's likely to have been adopted into the Great House Telvanni.

To be honest I either never paid much attention to what a minor House actually is or forgot what I read. I'm not sure if you can be in a minor and major House at the same time or not. The logical answer is that you can. It seems to me that maybe a minor House is more like a local subdivision of a Clan or House. Sort of like how real life political parties or religious organizations have central authority and local representatives. House Sotha would logically be a house of mages, considering the nature of their most famous member, and the fact their base seems to have been used for conjuring Daedra, which probably contributed to their demise.

Not that I know of. I just think that its an interesting tidbit thats not contradicted by anything (he is called Indoril Nerevar almost always), so it might as well be true.

There are a bunch of minor houses (clans, families) in each Great House. Which family belongs to what House can probably shift over the years, and some big families probably splinter so that one side belongs to one house and another to another (Ra'athim is both Hlaalu and Indoril).

Barenziah was born into the R'Aathim family, which I believe is part of both Indoril and Hlaalu.