Complex sentence: This concept explains how within the federal framework, there exists a system of filtration where state and local governments act as "laboratories," where law is created and enacted from the lowest level of the democratic system, up to the top level.
Split into simpler sentences: This concept explains how within the federal framework, there exists a system of filtration of governments. Within this filtration, state and local governments act as "laboratories," where law is created and enacted from the lowest level of the democratic system, up to the top level.