The principle of federalism structures power between national and state governments by distributing authority and responsibilities across different levels of governance. In a federal system, both the national government and state governments hold their own powers, defined by a constitution. Federalism allows for local adaptation of laws and policies, reflecting the diverse needs of various regions. Additionally, it encourages experimentation with different governance models, helping to address issues effectively. However, conflicts can arise over jurisdiction, leading to legal disputes that shape the interpretation of state versus national authority.