Democratic governments can be either national or federal in form. Whether the form of democracy matters, how it matters if, indeed, it does matter, and for whom it might matter are the types of questions this paper explores. Federalism is generally described as a pro-liberty form of government. Yet it is surely reasonable to wonder how the presence of two sources of political power within the same territory can be more favorable to liberty than when there is but a single source. It turns out that the pro-liberty quality of federalism is a possible but not a necessary feature of federalism. This essay explores this two-edged quality of federalism to discern more clearly the relation between federalism and liberty.