A federation is a large, often multi-ethnic, state originally based on mutual agreement between the participants. Compare with Empire, a term describing a large, multi-ethnic state, whose political structure was originally put together by Coercion... In Australian history, "federation" refers to the formation of the Commonwealth of Australia by six British colonies on 1 January 1901, and also to the political movement in the 1890s to bring this about. http://www.wikipedia.org/wiki/Federation
Switzer Land may be an even stronger model with its Canton system. Under the 1999 constitution, cantons hold all powers not specifically delegated to the federation. http://en.wikipedia.org/wiki/Switzerland
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