In a federal system, the central (or federal) government has much more authority than in a confederal system. The central government controls more trade policy, and makes decisions about policy areas that involve interactions between states (such as highway systems).
Nationality is a legal relationship between an individual person and a state. Nationality affords the state jurisdiction over the person and affords the person the protection of the state. What these rights and duties are vary from state to state.
If a person from an Italian family was born in Greece, then that person would have an Italian ethnicity, and not a Greek ethnicity. Nationality is a word that pertains to the state of origin. Nationality can be defined as the relationship between a person and his or her state of origin. Nationality also means that a person has the protection of the state where he or she was born.