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A confederacy is a form of government formed as a union of political organizations, though it differs from a republic in that the separate political units retain a greater degree of sovereignty over themselves.
Switzerland is often classified as a confederacy because of the degree of independence which its member cantons possess. The European Union is also often described as a sort-of confederacy.
Federal nations like Canada, though they may describe themselves as a "Confederation" are not true confederacies in that they still feature a strong executive branch.
See also: Confederation, federation, Confederate States of America