Federalism shapes governance in a country by dividing powers between a central government and regional entities, such as states or provinces. This division aims to balance authority and allow for local governance, promoting autonomy while preserving the unity of the nation. Under a federal system, both levels of government have distinct responsibilities and can legislate independently within their jurisdictions. Federalism encourages pluralism, enabling diverse approaches to policy-making and reflecting regional needs. However, it can also create tensions, particularly when federal and state laws conflict. Effective federalism requires cooperation and understanding between different government levels.