Overall, federalism is a system in which power is divided between a central government and regional governments. These regional governments are often called states or provinces.
In federalism, neither the national government nor the state/provincial governments determine how much power the other level has. This is not like a unitary government (where the national government determines what powers the states have) or a confederal government (where the states determine what powers the national government has). Instead, there is a constitution in which each level of government is given certain powers. Federalism is typically used in countries where there are real differences between various states or provinces. In more homogeneous countries, federalism is less necessary.