1. One of my favorite stories concerns the University of Chicago. The history department had a more junior member who worked in the history of ancient science. He was not being very well treated, although outside experts thought he was very very strong. A distinguished member of the science faculty went to the president and had the historian transferred to a science department, where he was much better treated.
What's interesting here is that a member of the faculty could go to the president and make a difference. (That the junior member was worthy is a given, and that the senior faculty member is very distinguished is also a given.)
There are few institutions where I imagine such might happen, although I am not at all sure: maybe Princeton, Caltech, MIT. There are many distinguished institutions where size or bureaucratic silos might prevent such action.
In general the chair or the dean are feared by the faculty. In places where the chair is rotating, the chair is unlikely to be feared. But in most places, the dean's relationship to their faculty is such that the dean holds most of the cards.
In some institutions, the faculty is so strong, that deans and even provosts must pay attention to some faculty if not most.. Very few institutions from what I am told.
You know you are a great university when the deans and the provost are afraid of the faculty. When the administration views itself as servant to the faculty rather than their boss.
2. In general deans are transient, while the faculty is ongoing and continuing, with many of the members having 25 years of service ahead of them or behind them. It makes sense to believe that the faculty has in mind the longer term interest of the institution, while the dean is concerned about what will happen in the next few years and perhaps their legacy. It also makes sense to think that the faculty might be collectively foolish, and the dean is there to make them rise above their nonsense.
We do not have clawbacks if deans make poor decisions. At least faculties that appoint or promote unworthy colleagues have to live with them for the next 30 years and they condemn their successors to that as well (keep in mind the dean is long gone). Of course, faculties might be shortsighted, and deans be strategic and committed to the longest terms. But the incentives are otherwise arranged.
3. I am told that you never want to make a weak appointment since that is likely to lead to further weak appointments, and declining standards. I do know that strong appointments reset the bar in measuring performance.