A federation is formed when two or more states or nations permanently transfer to the central government control over essentially common interests, such as defense, commerce, and currency, with the federating nations, or their people, retaining all other powers. In a federation the government generally levies its own taxes, and the citizens usually have direct representation in the federal government. Federal enforcement agencies can operate directly on individuals in all matters under federal jurisdiction.
Nations organized under a federal structure depart from the confederate realm of unlimited though vague commitments as to future collaboration, and enter into specific contractual relationship. A redivision of authority takes place. The national governments transfer limited but specific powers and responsibilities to the federal authority, and enforcement in the federal sphere operates directly on individuals in the same way that national and local laws operate within their respective fields independently of one another. The individual is brought into direct relationship with the new governmental structure not only because its laws operate directly on him -- not indirectly through national governments -- but because the duties and responsibilities he assumes towards the new authority, such as direct election of representatives to the legislative branch, the payment of taxes, and observance of world laws, involve a constant relationship of benefits and obligations to which he is already accustomed locally and nationally.
- Georgia Lloyd, Edith Wynner; E.P. Dutton and Company, Inc. (1944). Searchlight on Peace Plans: Choose Your Road to World Government.