Federalism is a constitutional principle providing for two layers of government - a central government and a lower level of governments - provinces, regions, republics or states - with some kind of chamber to represent the lower units in the central government, and usually some provision for guaranteeing the integrity of the lower levels of government.

The vertical axis is concerned with the distinctions between federal systems based on strong unitary political actors - states - and those whose lower units - nations - are more loosely assembled populations. The horizontal axis specifies the level of formality in the relationship among components of a federal union, ranging from a highly institutionalized set of constitutional requirements to the minimal recognition of a higher power, or authority, to keep the units together.