Federalism is a governing structure that divides power between national and subnational entities, such as states or provinces. This system enables multiple levels of government to coexist, each with defined responsibilities and authorities. Federalism operates by allowing local governments to address regional concerns while maintaining a unified national policy. Benefits include enhanced representation of diverse populations and increased responsiveness to local needs. Additionally, federalism can encourage policy experimentation, as states can innovate solutions tailored to their unique circumstances, contributing to a dynamic governance framework.