A Federal system of government is defined as one where the power is shared between the national government and the regional governments (in the case of America, the regional governments are the states).

The Full Faith and Credit Clause established that all states must legally respect the laws, decisions, and court rulings of any other state. It appears in Section 1 of the United States Constitution.

New Federalism is the process of devolving some powers back to the states to reduce the overwhelming power of the Federal government. It is closely associated with Richard Nixon (as well as Reagan and George H.W. Bush, who continued it), who initiated New Federalism by issuing Block Grants to the states and giving them greater license to freely spend government money to resolve social issues.

All of these are powers which are reserved for the states in the Constitution, except the ability to coin and print money. It would be quite illogical, and chaotic, to allow each state to coin and print its own money, as there would be no central currency. This condition existed under the Articles of Confederation and was predictably detrimental to economic growth.

The Kentucky and Virginia Resolutions were written, secretly, by Thomas Jefferson and James Madison in 1798 and 1799. They argued that states had the right to deem Federal laws unconstitutional and, when having done so, declare them nullified.

Concurrent powers, as opposed to reserved powers, are powers shared equally by the Federal and State governments. They include the ability to levy taxes; the construction and maintenance of roads; the power to establish lower courts; the maintenance of law and order; and the ability to provide for social welfare. They do not, however, include the regulation of interstate trade, which is a power specifically prescribed to Congress by the Commerce Clause.

Article 4 of the Constitution focuses on defining the power of the states within the federal system of government that prevails in the United States. It also establishes the relationship between the states and the federal government.

Drafted by the 2nd Continental Congress and in 1776, the Articles of Confederation were ratified in 1781. It was the first form of government that governed the United States throughout the Revolutionary War.

Article VI of the constitution contains what is known as the Supremacy Clause: the Constitution, acts of Congress, and treaties made are the supreme law of the land. Thus establishing the Federal government as supreme over states.

"Federalism" is a system of government where power is divided between a national/central government and subunits/states. The Founders believed in separation of power and limiting central authority, so dividing power between the Federal government and states was another check on power.