In a federal system, how are powers allocated?

• A. All power rests with the central government
• B. The states have complete sovereignty
• C. Local governments hold the majority
• D. Powers are divided between national and state/territory governments

Answer: (D)

In a federal system, power is divided between national and state/territory governments. The national level handles issues that affect the whole country, such as defence and foreign policy, while state and territory governments manage matters closer to local communities, like education and health. There are also areas where both levels can legislate (concurrent powers), but constitutional rules decide which level has priority. Local councils exist, but their authority comes from the states, not from the national government. This division between national and state/territory governments is what characterizes how power is allocated in a federal system.