This started as a question but it's now an FYI in case others have the same problem as I had until this afternoon.
The object properties panel displays graphical objects' width and height in some unit. You can set the unit for the current session by going View > Options and selecting an option for Display Units. However if you close and reopen FrameMaker the units will revert to whatever they were before.
The maker.ini file contains the setting UseDisplayUnitInTemplate which the documentation says determines whether or not the default units are taken from the application template.fm or are as defined in the maker.ini file. However I discovered today that even if UseDisplayUnitInTemplate is set to Off, the default units are still taken from the template when an existing document is opened; i.e. the value is not saved in the document you are editing, it's always taken from the template.
So I opened the template, changed the units in View > Options, saved the template, and bingo. Every document I now open is now showing sizes in points instead of inches.