There are several forms of Federalism, generally divided into Layer-cake and marble-cake Federalism. The differentiation between the two arises in the level of integration between the national and state governmental powers. Layer-cake is not really a practical or realistic version of the system, as it is incredibly hard to completely separate and define the twos responsibilities. I was not aware that the two levels intermix a lot, with the responsibilities transcending both levels, such as taxation and legislation. Because of this divide, there is a much more confusing and integrated system than appears from the outside. Clearly defined responsibilities include the defense of US borders and interests, the ability to wage war, and the regulation of interstate commerce all falling in the national governments hands, among other things. Falling to the states are more individual rights, such as marriage regulation, driving laws, and interstate commerce.
The topic of federalism has a lot to do with the topic of improving our democracy. Through the different combinations and measures possible in distributing the duties of the government, there are many ways to achieve prime representation and the most perfect system of government for the people. Because of the high possible levels of manipulation within the system, it is a system which is rather malleable and which can help to create a much more perfect system. Systems could work in setting more responsibilities to the state level, if people are more into a more involved government, tailored more to their needs. Or conversely, the people shift the power to the government if they want smaller local government and are more detached from the power of government.