Federalism is a system of governance that divides power between national and state governments. In this arrangement, both levels maintain certain autonomous powers while sharing responsibilities. Federalism impacts the distribution of power by allowing states to address local concerns with tailored policies while creating a unified national framework for broader issues. This system can lead to variances in laws and regulations across states, reflecting different political cultures and priorities. However, it can also foster tensions between state and federal authorities when jurisdictional disputes arise over policy implementation and regulation.