Federalism is indeed the most striking aspect of the American Constitution. It may be defined as the division of political power between a central government, and a number of local governments. Thus contiguous states associate themselves under a common central government. They retain a portion of their authority and jurisdiction, the rest of which is transferred to the central government. The United States is not the only government to establish a federal union. Switzerland became a federal state in 1848, Canada in 1867, Germany in 1867, and Australia in 1900.

There is a difference between a federal union and a confederation which is an association of sovereign states. These states delegate certain limited powers to a central authority however, they retain their full sovereignty. They even possess the right to withdraw from the association. The Greeks sometimes temporarily banded themselves into a confederation.