Subsidiarity

Subsidiarity should be a guiding principle when making laws, regulations etc. The essence of subsidiarity is that power, authority and decision making should be at the lowest possible level, and that organizations should be no larger than necessary.
Our anti-trust laws are an example of this principle already. I think our anti-trust laws do no go far enough for corporations and could be strengthened. I would go farther, though, and also apply something similar to government—returning power and decision making to more local levels.
Reason why:
Better decisions as the authorities are closer to the ground
Easier access to authorities to appeal decisions.
Local flavor.
People can shape communities to suit themselves/culture.

With respect to corporations---laws and policies that benefit the large and comparatively disadvantage the small should be reconsidered. Much regulation falls into this category. Sometimes such regulation is worth the cost (in terms of making our world more monolithic), other times it is not. Lawmakers need to think about this and rethink our current regulations on its impact.

In a nutshell, out quality of life is lowered when we constantly have to deal with employees who have no power to fix our problems --- or are ourselves in such a position. That is also true for government as well. I would add the caveat that there needs to be oversight where larger organization can step in and stop local oppressions. Of course one wonders what steps in and stops central oppression.

Democracy & Federalism

There are many supporters of a federalist system. It is not difficult to see why. A federalist government hopes to enjoy the advantages of a large nation and without its disadvantages of crushing conformity and oppression. It enjoys the military strength and diplomatic clout that comes through sheer numbers. It also enjoys the advantages of a large heavily integrated free trade network existing within its borders. Unlike a centralized state however, as many issues and powers are held on a local level, it has flexibility in governing. Problems can be dealt with swiftly and sensibly by administrators on the ground and intimate with the circumstances. Additionally the smaller governments can experiment with various laws and social institutions as well as a adopting those successfully pioneered by others.
It is dismaying to note however, that democracy by nature seems to steadily eradicate federalism and centralize power. As an example the United States Government (USG) has undergone a steady transformation from its beginning, becoming more powerful relative to state governments and more democratic. Some of the powers it has gained are increased taxation authority, regulatory oversight of businesses/banks, a standing army, voter qualifications and many more.
To consider why this might be we will consider the Lincoln-Douglas debates. Slavery was a big issue at that time. Lincoln was unequivocal in his stance against slavery. Douglas vacillated and said that slavery was a matter for states to decide. In the later presidential campaign douglas was decisively defeated because neither pro nor anti-slavery faction supported him. So his federalist stance looked weak. Additionally it doesn’t hold any appeal for voters. Essentially the message is: vote for me so you all can settle the issues later. That’s nice but just not competitive when compared to someone who wants to settle the issue now, decisively and forever.
That seems to be the primary reason for centralization to occur if the top layer is highly democratic. Power wins elections. Not only can we see this in the context of a social crusade like that of slavery but also more crassly in machine politics. Rewarding supporters, getting benefits to the voters who elected you is all much easier in the context of expanding power of the central government.
A non democratic top layer on the other hand will run into problems if it tries to grab power. The sub entities’ (states) will band together and oppose what they see as a curtailing of their privileges. One can see this in the early American senate when senators where more like ambassadors for their respective states. Compromises where each state decides it’s policy would be an appealing solution for this body in many cases. A similar designed organization – The UN – also shows no sign of growing more powerful as time goes by.
Has this decreasing federalism been bad or good? A stronger central government was instrumental in ending slavery, and winning the civil rights fight of the sixties. On the other hand the federal government seems incapable of decreasing in size or in changing programs to meet changing circumstances. For example social security has structural flaws, most think it will fail, most want something that fills its function. However there is almost zero chance of any major reforms. One imagines that if each state had their own version that various alternatives would have been tried and a better system would be in place in most places.