Federation refers to a political system where multiple states or regions unite under a central government while retaining their individual sovereignty. This structure allows for a balance of power, enabling local governments to manage their affairs while the federal government oversees national issues. Examples of federations include the United States and Germany, where states have their own laws and regulations but are also subject to federal law. In a federation, the division of powers is typically outlined in a constitution, which specifies the responsibilities of both the central and regional authorities. This system promotes cooperation and unity among diverse groups, allowing for a more tailored approach to governance that can address local needs effectively.