Democracy is a form of government in which power rests with the people, who either create policies directly or elect leaders to do so on their behalf. The United States, a democratic republic – meaning citizens elect representatives to give voice to their interests -- has a federal system, in which power is divided between the national government and the states.

Federalism in the Constitution

While the word "federalism" never appears in the Constitution, the idea of a dividing power between the national and state governments was a fundamental idea in America’s founding document. The U.S. system of government was devised in reaction to the failed Articles of Confederation government that the states established the Revolutionary War. Under the Articles, each state retained the rights of a sovereign nation, and the central government was very weak and unable to levy taxes. As a result the states were, as George Washington put it, "incapable of governing ourselves." When the Constitutional Convention convened in 1787, the states recognized the need for a stronger national government, but were unwilling to cede all their powers. The federal system the Constitution envisions was the solution to these competing concerns.

Federalism and Democracy

In a confederal system, laws are fashioned closer to the people, and may better reflect the needs of local constituencies. In other words, state and local leaders, the ones who are closest to those who elect them, are thought to be more responsive to local needs, which makes for a better-functioning democracy. The federal system seeks to maintain these advantages while providing the stability, efficiency and unity that come with a central government.

Conflicts in Federalism

While the Constitution strives to strike a balance, federalism from the start led to tensions between the states and the national government. The first Supreme Court chief justice, John Marshall, said that this conflict "is perpetually arising, and will probably continue to arise, as long as our system shall exist." History has borne this out. The Civil War was fought in part over states' rights – in particular Southern fears that the Northern-dominated national government would block the expansion of or even abolish slavery. Even today we see these fights play out, most recently on the issue of marijuana, as several states have legalized either recreational or medicinal marijuana use even though the federal government prohibits the drug's use. In other recent cases, states have attempted to restrict abortion beyond the scope permitted by the U.S. Supreme Court and nullify parts of the national health care law.

Federal Supremacy

When a conflict arises between the state and national governments, the national government is supreme. According to the Council for State Governments, "If there is a true conflict between federal and state law, longstanding legal doctrine leaves no doubt as to which law prevails – the federal law trumps contrary state law."