Federalism involves dividing power between a central authority and constituent units. In India, power is shared between the central and state governments according to the constitution. While not explicitly called a federation, India has a two-tier system with the central and state governments. A third tier of local governments was later added through panchayats and municipalities. Federalism in India balances unity and diversity through power sharing between levels of government and recognition of linguistic and cultural differences through state reorganization.