Federalism is defined as a system of government that separates power between a centralized government and several localized satellite governments, such as states with each entity having defined or self determined actionable powers. In contrast, other forms of government, such as Unitarianism and Confederacies, divide power differently. A Unitary government has centralized powers which have supreme dominance over all subsidiary governments within its boundaries. A Confederate government confers power to the numerous regional governments and has no centralized powers. The federalist state seeks to achieve balance and equity between local and centralized governing bodies.
In order to understand how a Federalist government works, two simplified "bakery" models have been created to describe the separation of powers. The first model was a "layer cake" that is a mostly accurate depiction of how the American government was originally set up by the framers of the Constitution. It holds that governmental powers were divided neatly into discrete layers like that of a layered cake. National powers were at the top overlying the State powers defining a dualistic, "separate but equal" division of powers. As our nation went through its growing pains, it became apparent that this "neat and precise" division of governmental powers was not an apt description of how our government was actually working. Thus, a new model was formed, that of a "marble cake" where governmental powers are not so neatly divided. The "marble cake" shows federalism how it operates today: governmental units and their powers swirling around each other with no precise stratigraphy or boundaries.
Since the framing of the Constitution a debate has raged on concerning the parameters of the division of powers between federal and state governments, a debate that is defined by the advantages and disadvantages of Federalism as a system of government.