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What is a Federal System?

Jessica Ellis
Updated Feb 18, 2024
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A federal system is both a political and philosophical concept that describes how power is given to governments, and in many cases governments are described using this term as a way of distinguishing them from other leadership structures. Federal systems often vary widely in actual application, but all feature a central government with specific powers over the whole union. There are many countries in the modern world that operate using a federal government, including Australia, Germany, Brazil, the United States, and Canada.

Importance of Central Government

One of the most distinguishing features of this sort of government is that it gives all powers pertaining to the nation as a whole to the national governmental entity, usually deemed “the federal government.” In most countries that operate under this system, only the national government can declare war on another country, for instance. Certain legal regulations and restrictions also come from this entity and they apply to all citizens and residents no matter their specific location.

In most cases, federal government power is designed to support and in many cases augment power that is granted to smaller localities. State, provincial, or local power tends to be more focused on issues that directly impact its own residents, rather than delving into broader issues that might concern everyone. In the United States, for example, one state — say the state of Nevada — cannot dictate what laws another, such as Montana, enacts. It can make restrictions on things that Nevada residents can and cannot do, though, and at times these things may be in conflict with or even directly oppose rules that apply in other states. States and localities in a federal governmental regime are often granted a lot of leeway to make their own rules, so long as those rules are in line with the broader goals and parameters set by the overarching federal structure. Confusion often arises over the designation of an issue to national or state government levels.

Evolution and Change

Federalism is a constantly evolving system with rules and adjustments particular to each country that adopts it. It often requires a consistent dialogue between local and national governing bodies, which many experts suggest is a necessary and beneficial relationship. Unlike the ancient monarchy and autocrat systems, a federal government rarely suggests that it is made perfect and unquestionable by a higher power, as was the case for thousands of years in many countries. Instead, it propels a constant stream of arguments and changes that adjust over time, with the hopes of continually creating, in the words of the first federalist constitution of the United States, "a more perfect union."


Federal governments are often controversial when it comes to how power is actually assigned and exercised. Although many agree that a central government is essential to the running of a large, diverse nation, how much power the government should be granted is unclear. In the United States, for instance, there is a running controversy over state versus federal rights that has been going since the constitution was first drafted. The European Union has faced similar argument since its creation in the 1990s. Many are uncomfortable with the amount of power given to federal governments. In many cases, these governments are made up of both appointed and elected officials, though questions can arise about their neutrality or ability to function outside the parameters of an “establishment mentality.”

History and Modern Examples

The United States is considered the oldest federal nation in the world, but adopting this particular governmental structure was a matter of considerable debate amongst the founding fathers. Anti-Federalists such as Thomas Jefferson and Patrick Henry argued that a powerful central government would only replace the monarchy system and allow for curbing of the liberty the young country was forcefully seeking. During the Civil War, Federalism in America faced another test, when several states seceded from the Union only to be brought back through open warfare. Many experts cite the Civil War as a defining moment in terms of Federalism, suggesting that the national government made it at last clear that the country would be unified under a federal government at any cost.

Other countries have had more peaceful transitions into a federal system. Switzerland, which is widely considered to be the world's second-oldest federalist country, faced little controversy in establishing its direct democracy system. In Brazil, the system was enacted by royal decree in the 1890s following a military coup but has since been met with re-approval by each successive government.

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Jessica Ellis
By Jessica Ellis , Writer
With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis brings a unique perspective to her work as a writer for WiseGeek. While passionate about drama and film, Jessica enjoys learning and writing about a wide range of topics, creating content that is both informative and engaging for readers.

Discussion Comments

By anon277067 — On Jun 27, 2012

As I study the above comment that Nepal must be a federal country, I object only because being a federal country development is not possible because the people of Nepal in large numbers are against the federalism. I agree that there is political dispute and imbalance and federalism is not the solution for Nepal.

By anon169829 — On Apr 23, 2011

I don't have much idea about federal system of government but according to some studies I made, I think the federal system has become a must in Nepal. Maybe after the introduction of federal system the political instability in Nepal could be fixed.

By JoseJames — On Oct 01, 2010

I think one of the biggest federalism issues we have today is the rights of doctors and patients to perform abortions. There are many states that have expressed desire to make abortions out right illegal but because of our national federal system and the reaffirmation of our courts women can have abortions.

This push and pull movement of power exists between our states and federal government. Luckily we have the ability for our system to flex as needed.

By anon112725 — On Sep 21, 2010

Switzerland was considered a Confederation and Canada has been a federal state since 1867. Therefore, Canada is the second oldest federal state.

Jessica Ellis

Jessica Ellis


With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis...
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