Final answer:
The system of distributing powers between a central government and individual states is called federalism, a system where power is constitutionally divided to create a balance between national and state governments.
Step-by-step explanation:
The system of distributing powers between states and a central government is called federalism. Federalism is a system of government where power is divided between a national government and various regional governments. In the United States, the Constitution establishes this division of powers, specifically granting some powers to the federal government while reserving others for the states. For example, the federal government has the authority to negotiate treaties, while state governments have the ability to regulate driving laws within their jurisdictions.
Federalism contrasts with unitary systems, where all power is held by the central government, and with confederations, where power is primarily held by regional governments. Moreover, federalism can foster political participation, promote policy innovation, and accommodate diverse viewpoints across a nation. However, it also has potential downsides, such as creating economic and social disparities between states and sometimes hindering national initiatives.
The U.S. Constitution, through its federal design, allows for a balance of decentralization, as seen in varied state policies, and centralization, such as the exclusive right of the federal government to print money. The interplay between federal and state governments is complex and continually evolving, with the U.S. Supreme Court often playing a pivotal role in interpreting the distribution of power within the federalist system.