There are, in fact, TWO things keeping the Daedric Princes in check - the Covenant of Akatosh as well as the Pact.
The Covenant of Akatosh was a deal made between Akatosh, leader of the Aedra, and Alessia, queen of the first Human Empire.
"Akatosh drew from his breast a burning handful of his Heart's blood,
and he gave it into Alessia's hand, saying, 'This shall also be a
token to you of our joined blood and pledged faith. So long as you and
your descendants shall wear the Amulet of Kings, then shall this
dragonfire burn -- an eternal flame -- as a sign to all men and gods
of our faithfulness. So long as the dragonfires shall burn, to you,
and to all generations, I swear that my Heart's blood shall hold fast
the Gates of Oblivion." ― Covenant in the Trials of St. Alessia
The Covenant between Akatosh and Alessia is powerful, but it only prevents a full-scale invasion of Tamriel - it literally prevents a Daedric Prince from opening gateways between their plane of Oblivion and Mundus.
There is a second covenant - known as the Pact - that was made between the Aedra & Daedra millennia ago. The Pact decrees that no Daedric Prince may fully interfere with Mundus, or enter another Prince's plane of Oblivion, unless invited. In his frustration & anger, Mehrunes Dagon broke this rule when he physically stepped into the realm of Mundus at the end of Oblivion. As a result, Akatosh himself took action and joined with Martin Septim to drive Dagon back to the Deadlands. Ideally, this second covenant is enforced by the Nine Divines and the Daedric Princes themselves, but realistically there is a good deal of flexibility in its enforcement.