The Articles of Confederation created a confederation type of government. In a confederation form of government the states retain most of the power. When the Articles of Confederation were written, the federal government had significant limits put on what it could do. For example, the federal government couldn’t levy taxes. The federal government couldn’t make people join the military. The federal government also couldn’t resolve disputes between the states.
Because of these limits, the federal government created under the Articles of Confederation had many issues. There were financial issues. It was difficult for the government to pay its debts. It had trouble dealing with countries like Great Britain and Spain that were pushing us around and interfering with our trade. The federal government also had trouble keeping order. This was very clear when Shays’ Rebellion occurred.
Thus, the Article of Confederation created a system of government in which the federal government had limited powers while the state governments had many powers.