Complex sentence: Here Madison expressly held that each state was not its government, but its "People," who were the supreme sovereign rulers thereof as a separate nation, while the state's "government" held only those powers delegated to it thereby.
Split into simpler sentences: Here Madison expressly held that each state was not its government, but its "People," who were the supreme sovereign rulers thereof as a separate nation. Meanwhile the state's "government" held only those powers delegated to it thereby.