The breakdown, There is a seperation of powers between the national, and state level of government. Whatever is stated in the Constitution is what powers the national government has. Whatever is not stated, is left to the state government.
Drinking age was not part of the Constitution, so that age limit is given to the states to decide. We have the power to choose, but at a great cost. If each state doesn't put the drinking age at 21, the national government will not provide funds for the state to use.
Is that really giving much power to the state? If there was a huge crisis that is given to the state government to decide, do you think the national government will just use bribes, or "blackmail" to find loopholes in the Constitution so they can work it their way? Not only is this drinking laws, but many others.
Well, the federal government was left with the "ower of the purse", which means that they can make people do what they want by giving out money(or not). Even though it may be corrupt to some, the system gets things done...
The federal system in America is such that the states have powers that cannot be taken away from them by the central government in DC. In reality however any 'incentives' for states to comply with Washington are perfectly legal from a constitutional perspective, bearing in mind the constitution was written way before any of these problems could have been forseen.
The federal system just doesn't really want the States to have TOO much power, and they allow States to only carry a handful of power and authourity. In other words, the national goverment lets state goverments just enough power to get by a day, and not more. If a state was really to face a huge crisis, the state would either crumble or the national goverment would have to step in. Right now, with the stocks on a roller coaster ride, the national goverment is also losing power, while states are not losing or gaining power. So, if you think about it that way, right now, the State goverment's power is closing on the federal goverment's power.
Well obviously the balance of power between state and central government is what makes the distinction between a federal system and a confederacy, however the states do have more power than you put across. They can make their own laws on almost anything that doesnt involve the constitution. Of course if this law is ridiculous then the central government can step in through various legislation. In addition the governor of a state does hold quite a lot of power in his/her state of course. The national government is losing power economically but this doesnt really affect the political relationship between the states and the central executive.
