Devolution is the process by which governmental power or authority is given by a large centralized government to lower levels of government, such as those at a state or territorial level. While this power may be given over for a long term, the transfer can be temporary in nature and the power may ultimately be taken back by the larger government. This type of transfer of power is often financial in nature, allowing a state or province to deal with fiduciary issues usually handled by the national government. Devolution is quite common in democracies and similar forms of government, and can be an important aspect of the governing of a country.
Though similar in some regards, devolution is not the same as federalism. Federalism divides the powers of a government into different levels and various regional systems. A federal system of government typically establishes a single national government, as well as smaller governmental bodies for governing states or territories. This division of power is usually permanent and establishes how each region is able to self govern. States may then establish smaller governments for counties within them, and potentially even smaller bodies of government for individual cities or townships.
Devolution, on the other hand, transfers powers between those established bodies from the top down in a way that may be temporary or easily reversible. In the United States (US), for example, the individual states are granted certain powers within the confines of the US Constitution. These powers are considered permanent and cannot be overruled or taken away by any constitutional act of the federal government. If certain powers that typically reside within the federal government, such as funding for certain projects within a state, were given temporarily to a state, then it would be a devolution of those powers.
Similarly, the powers given to a city or county government within a state in the US are typically devolutionary in nature. These powers are not guaranteed, and most states could simply dissolve city governments and retain power within the state government instead. This is typically not done, however, since devolution of power to individual cities and counties often makes governing easier.
Devolution, or a lack of it, can be the source of great frustration and tension, however, when power is retained by a larger body that is desired by lower levels of government. The separation of governmental powers in Ireland into Northern and southern Ireland, for example, has often been the source of much contention and violence over numerous decades. Powers that were initially granted to Northern Ireland were later rescinded and the resulting violence demonstrates the importance of the distribution of power within a country.