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.
Ethnicity is state of belonging to a social group that has a common national or cultural tradition. This is, by definition, a fluid concept; ethnic groups can be broadly or narrowly construed. For example, they can be as broad as  Native American  or as narrow as  Cherokee .n example of race is brown, white, or black skin (all from various parts of the world), while an example of ethnicity is German or Spanish ancestry (regardless of race).