AP Gov. Fall 2015 AHFRQ Federalism When the Founding Fathers endorsed federalism as a system of limited government, the country was vastly different than today. a. define federalism as a principle of limited government b. Identify and explain 2 ways in which the national government has been able to expand its power within the federal system. c. Identify and explain one area in which states have been able to retain its power within the federal system.