The central government is often called the federal government, and the smaller units, states or provinces. In a federal system, the division of powers is usually defined in a constitution. The United States, Canada, Australia, and Switzerland have federal systems.
Federal systems differ from unitary systems.
In a unitary system, all power legally derives from the central government. States or provinces have only the powers the central government gives them. In a true federal system, some powers are constitutionally reserved for the states or provinces. Also in a federal system, the central government has direct authority over the people concerning powers granted to it in the constitution. This feature distinguishes a federal system from a loose grouping of states, commonly called a confederation.