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.
Nationality is a necessary but not sufficient condition to exercise full political rights within a state or other polity. Nationality is required for full citizenship, and some people have no nationality in international law. A person who is denied full citizenship or nationality is commonly called a stateless person.