Final answer:
When a state allows a city to govern itself, this is known as home rule, which grants local governments autonomy to make their own policy and tax decisions, as specified in a charter. Home rule is an exception to Dillon's Rule, emphasizing state supremacy.
Step-by-step explanation:
If a state grants a city the ability to govern its own local affairs, this delegation of power is described in the text as home rule. Home rule gives local governments a certain degree of independence and discretion to make policy and tax decisions. This autonomy is typically outlined in a local charter, which resembles a state constitution but focuses on the local government's roles and authorities.
Home rule can sometimes lead to conflicts between state and local powers, as seen in legal measures or specific instances like the State of Texas overturning a city's fracking ban. Despite Dillon's Rule, which suggests state power has supremacy over local jurisdictions, home rule serves as an exception that provides some measure of self-governance to local entities.