In a unitary system, the central government has all the power. In a federal system, some powers are given to the central government and other powers are given to the lower levels of government...

The difference between a unitary and a federal state is not that one is more decentralized than the other, but that the former is decentralized through legislation whereas the latter is decentralized by constitution. In a federation, certain matters are thus constitutionally devolved to local units, and the central government cannot unilaterally revoke this decentralization, as it can in a unitary state. Read more: http://wiki.answers.com/Q/What_are_the_differences_between_unitary_and_federal_systems#ixzz1dqySYwqe