How do the federal and unitary systems of government differ? The federal system is only used by democracies, while the unitary system is only used by authoritarian governments. The federal system divides power among a central government and smaller political units like states, while the unitary system has a central government that is supreme and its power is undivided. The federal system establishes a weak central government with little real power, while the unitary system creates smaller political units with a great deal of power. The federal system is one in which the central government can dissolve smaller political units, while the unitary system is one in which the central government cannot take power from smaller units.