The plot Before the Black Walls says:

River When revealed, name a challenge type. In order to declare any characters to attack or defend during challenge of that type, a player must declare all of his or her eligible characters. Then, if this is your revealed plot card, trigger the 'when revealed' effect of the top River plot card in your used pile.

What does "eligible characters" mean here?

The situation:

1. Military challenge is chosen and I have 2 chars with military icons.

2. 1st of those 2 is used in power challenge and is knelt now.

3. Can I kneel the 2nd to declare military or I cannot attack or defend in military this round at all because my 1st eligible char with military icon is knelt?

We've always played that eligible means any character that would normally be able to participate in the challenge - i.e. you cannot decide to not include any such character

The fact that other characters are no longer "eligible", e.g. as they are kneeling, is irrelevant

Just because HastAttack's answer skews a little confusing for me:

"Eligible characters" is determined at the time you declare attackers or defenders in the in the named challenge type. In order to be "eligible" (and forced to participate by the plot) that character must be a legally available as an attacker/defender at the moment the player is required to declare attackers/defenders.

So, a MIL/POW character that was knelt for an earlier POW challenge will not be "eligible" when the (named) MIL challenge is declared. So the plot does not force you to declare him as an attacker at that time. You can go ahead and attack with your one standing MIL character and still satisfy the requirements of the plot.

Thank you guys. It's clear now.

The plot card is so-so as opponents tend to just do the "all in" challenge last, if at all - if you are attacking first you might want to keep your e.g. MIL guys standing for defence