Federalism is a mode of government that combines a general government (the central or "federal" government) with regional governments (provincial, state, cantonal, territorial, or other sub-unit governments) in a single political system, dividing the powers between the two. Federalism in the modern era was first adopted in the unions of states during the Old Swiss Confederacy.
Federalism differs from confederalism, in which the general level of government is subordinate to the regional level, and from devolution within a unitary state, in which the regional level of government is subordinate to the general level. It represents the central form in the pathway of regional integration or separation, bounded on the less integrated side by confederalism and on the more integrated side by devolution within a unitary state.
Examples of a federation or federal province or state include Argentina, Australia, Belgium, Bosnia & Herzegovina, Brazil, Canada, Germany, India, Iraq, Malaysia, Mexico, Micronesia, Nepal, Nigeria, Pakistan, Russia, Switzerland, the United Arab Emirates, and the United States. Some characterize the European Union as the pioneering example of federalism in a multi-state setting, in a concept termed the "federal union of states".
The terms "federalism" and "confederalism" share a root in the Latin word foedus, meaning "treaty, pact or covenant". Their common early meaning until the late eighteenth century was a simple league or inter-governmental relationship among sovereign states based on a treaty. They were therefore initially synonyms. It was in this sense that James Madison in Federalist No.39 had referred to the new US Constitution as "neither a national nor a federal Constitution, but a composition of both" (i.e. as constituting neither a single large unitary state nor a league/confederation among several small states, but a hybrid of the two). In the course of the nineteenth century United States, the meaning of federalism would come to shift, strengthening to refer uniquely to the novel compound political form established at the Philadelphia Convention, while the meaning of confederalism would remain at a league of states.