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Understanding that a government's role is to protect individual rights, but acknowledging that governments have historically been the major violators of these rights, a number of measures have been derived to reduce this likelihood. The concept of a Federation is one such measure.
A Federation is a loose organization of governments. The parties involved agree to work together towards particular ends. These ends vary from military purposes, to economic cooperation. The organization is limited by a few factors. First, it is entirely voluntary. The member parties stay part of the organization as long as the benefits are greater than the costs. Second, each party usually has significant clout, preventing the organization from attempting to enact rules to which they do not agree. Third, since the members of the organization are direct representatives of the parties involved, they will act according to the wishes of their party, or be removed.
A Federal Republic, like the United States, borrows from this idea. Originally, the Senators were representatives of the states, elected by the states. Additionally, the Electoral College, divided by states, elects the President. In this way, the strengths of a national government could be combined with the strengths of a loose federation. The national government had the power to enforce agreements between the states, while being heavily controlled by the states. This competition between the national government and the states allowed a check against either parties from gaining too much power.
The national government was supposed to be a government of the states, instead of the people. It had the ability to prevent the states from abusing their own citizens, or the citizens of other states, but had no ability to abuse those citizens directly. Since then, this has changed, of course. Senators are elected by the people now, and the Electoral College is essentially a popular vote as well. The result is that the national government is a government of the people now.
Federalism, properly enacted, can be a powerful force towards protecting the rights of the citizens. At its root is the knowledge that power, when centralized, is dangerous. Several smaller governments are safer, since there is still a place to run if things get bad. Also, control over the government is easier at the local level than at a more distant national level.