In a federalist government the powers are divided between the central government and the state governments. This keeps either government from becoming too powerful and allows for the voice of the public to be more accurately represented.
Powers reserved for the national government are the power to make, evaluate and carry out federal laws. This means that they can make laws that apply to their entire district and territories regardless of state laws. They have the power to collect taxes. The national government holds diplomatic powers. These means they make trade deals, treaties, delegate ambassadors and handle all international affairs for the nation. Some other powers bestowed to the national government are the power to declare war, make environmental policy, manage the national economy and issue the national currency.
Some of the limits of the national government are the Writ of Habeas Corpus which means a prisoner cannot be held without the right to challenge his imprisonment. The national government also cannot tax across state lines.
The 10th Amendment to the Bill of Rights grants powers to the states. The states have powers in common with the national government such as taxing, building infrastructure like roads and bridges, making and enforcing laws and establishing courts. They also have the power or responsibility to provide for the general welfare of the people and provide a free public school system.
States are denied the power to enter treaties or govern relations with foreign nations. They cannot declare war nor create a currency as well.
