It has been defined as a political system in which decisions are taken at the appropriate level, with layers of authority without subordination. (See also Subsidiarity)

The opposite of Empire in which all power is derived from the center.

Some political scientists believe it is derived from the Iroquois of North America who influenced the writers of the United States constitution. However, the writers of the US Constitution certainly studied existing European and ancient examples, such as the Swiss Confederation.

There is a range of federations according to the power of the central or federal government.

Weak Federations (Associations of states):

• the United Nations,
• AU, African Union;
• OAS, Organization of American States;
• ASEAN, Association of South East Asian States;
• Commonwealth of Independent States
• (British) Commonwealth

  Stronger

• European Union
• Union of Sovereign States (aborted)

  Strong

• Canada
• Australia
• United States
• Malaysia
• India

The European Union may be evolving towards a stronger federation (but it may not be).

Federations work best when each layer can raise revenue. For example, Nigeria is a federation in which the states rely for their money on the Federal Government. They have no real autonomy therefore and in fact are devolved. The states of the United States have sources of revenue which make them autonomous, though they have also been receiving large sums from the federal government. In the Swiss federation, the Cantons (Counties) have the main revenue-raising authority, and the Federal government is essentially dependent on the Cantons.

The strength of a federal government depends on the strengths of the units. Thus Nigeria began as a federation of three very large states. It now has over 20. As the states get smaller and more numerous the power of the state governments declines to become that of a local government. As long as the European Union is made up of the national states the Community powers are unlikely to become strong. Even if some of the national states split into their components (Scotland, Catalonia etc.) the EU powers are unlikely to become what some British politicians apparently fear: a strong Central Government.