Federalism promotes regional autonomy by distributing power between central and local governments, allowing states or provinces to exercise authority over certain matters. This system enables regions to tailor policies to their unique cultural, economic, and social contexts, fostering greater responsiveness to local needs. By decentralizing governance, federalism enhances citizen participation and accountability, empowering local leaders to address specific issues. However, it can also lead to tensions and disparities in policy implementation across regions, highlighting the complexities of shared governance.