This also helps curtail corruption. It is ostensibly easier to coerce/bribe/etc a state than a nation, but you have to do this for every single state and then try to keep them all under your thumb. A federal government may ostensibly be harder to corrupt, but once corrupted they can affect your whims on a national level and be relatively easier to maintain control of.
This decentralization of power seems to be the easiest way to have a functioning political system. It's always the same decision. Centralization paired with selflessness, benevolence, and competence will trend towards utopia. Centralization paired with selfishness, greed, or incompetence will trend towards dystopia. Decentralization will always just trend towards mediocrity as a mish mash of the averages of society.