Difference: (i) Unitary government has only one level of government whereas a federal government has two or more levels of government. (ii) In unitary government, the sub-units are subordinate to the centre, whereas in a federation, central government cannot encroach on the rights of state governments. (iii) In unitary system, centre can order the sub-units which cannot happen in federation. A federation is preferred because: (i) It helps in making administration effective and efficient. (ii) It helps to accommodate all diverse groups.