Final answer:
Devolution is the process by which a national government grants powers to local authorities or regions, potentially leading to increased autonomy or the creation of subnational entities. It contrasts with federalism, where power is shared between national and subnational governments.
Step-by-step explanation:
The process by which the national government of a country yields some of its powers to local authorities is known as devolution. This process allows for the creation of regional governments with specific responsibilities. In certain cases, it can lead to the formation of a nation-state within a larger state, as seen with various ethnic populations in Europe. Notable examples include Scotland and Wales, which have sought to obtain more autonomy from the United Kingdom, and the Basque region's desire for independence from Spain and France.
New Federalism is another related concept which refers to the transfer of certain powers from the federal government to the state government. It was notably pursued by Presidents Nixon and Reagan, aiming to decentralize social programs and grant more control to the states.
Federalism, on the other hand, involves a balance of power between national and subnational governments, such as the system in place in the United States.