In a federal system, the relationship between a state and its constituent political units is characterized by a division of powers. Federalism establishes a framework where authority is shared between a central government and smaller subnational entities, such as states or provinces. Each level of government operates within its own sphere, with specific responsibilities and powers allocated by a constitution or legal framework. This system allows for local governance and representation while maintaining national cohesion. The interplay between state and local units can vary, influencing policy and legislation at both levels and shaping the overall functioning of the government.