One of the relatively few underanalyzed major topics in the extensive academic literature on federalism is the relationship between federalism and totalitarianism. A potential advantage of decentralized federalism is that it might serve as an obstacle to the establishment of an oppressive totalitarian state. Yet most scholars have largely ignored this possibility. One writer who didn't, however, was Adolf Hitler, who had this to say on the subject in Chapter 10 of Mein Kampf (which is devoted to German federalism):
[A] new and triumphant idea should burst every chain which tends to paralyse its efforts to push forward. National Socialism must claim the right to impose its principles on the whole German nation, without regard to what were hitherto the confines of federal states. And we must educate the German nation in our ideas and principles. As the Churches do not feel themselves bound or limited by political confines, so the National Socialist Idea cannot feel itself limited to the territories of the individual federal states that belong to our Fatherland. The National Socialist doctrine is not handmaid to the political interests of the single federal states. One day it must become teacher to the whole German nation. It must determine the life of the whole people and shape that life anew. For this reason we must imperatively demand the right to overstep boundaries that have been traced by a political development which we repudiate. (emphasis added)
Hitler and the Nazis rightly saw German federalism as an obstacle to the realization of their aims - which required a highly centralized state. And it is not surprising that they quickly stripped the German states of most of their authority after taking power in 1933. Other things equal, a totalitarian government is more difficult to establish in a federalist state than in a unitary one, because in the former state and/or local governments will retain greater ability to resist a totalitarian movement that comes to power at the center. If the totalitarians are unable to stifle the autonomy of state governments, then their vision cannot be fully implemented, even if they remain in power at the center. In Hitler's words, federalism makes it harder for a totalitarian movement to "impose its principles on the whole . . . nation." Furthermore, relatively autonomous state and local governments might make it more difficult for the totalitarians to seize power at the center in the first place.
The fact that Hitler didn't like federalism is not in itself a reason to support it; such an argument would be an obvious example of Eugene Volokh's "reverse Mussolini fallacy." But the likelihood that federalism may have the benefit of making the establishment of a totalitarian state more difficult is an important advantage of such a system relative to a unitary state.
Even if federalism obviates the danger of a totalitarian takeover only slightly, that might still be an important advantage given the high cost of totalitarianism. For example, let's assume that in Country A, federalism reduces the chances of a totalitarian outcome from 2% to 1%, and let us also assume that A has a population of 20 million people. Given that totalitarian governments typically engage in mass murder that kills 5% or more of the population, reducing the chance of a totalitarian outcome in A from 2% to 1% has an expected value of at least 10,000 lives saved. That estimate conservatively assumes that the totalitarians would kill "only" 5% of A's population if they succeed in taking over. There are numerous totalitarian states where (including the USSR, China, Cambodia, Ethiopia, Yugoslavia, Germany, Vietnam, and others), where totalitarian rulers accounted for a much higher death toll than that. It also ignores all the lesser human rights violations that occur under totalitarian rule such as forced labor, violations of freedom of speech, and so on.
In some well-established democracies, the background probability of a totalitarian takeover may be so low, that the utility of federalism in driving that probability down still further is insignificant. In less-established democracies, such as that which the Nazis faced in the 1920s, the background probability is considerably higher.
Finally, it's worth noting that Germany is the only example of a federalist nation that fell victim to a totalitarian takeover despite its federalism. Except in cases where totalitarianism was imposed by foreign conquerors, every other transition to totalitarianism occurred under unitary governments. Even in the German case, federalism helped prevent earlier efforts at a totalitarian takeover in 1919 (by communists) and 1923 (Hitler's Beer Hall Putsch). Fascist Italy is not a counterexample, because Mussolini's dictatorship, although oppressive, never rose to the level of full totalitarianism and - not coincidentally - did not engage in mass murder and other atrocities on anything like the same scale as the Nazis did (e.g. - Italian Fascist officials actually refused to take part in the Holocaust).
The degree to which federalism impedes totalitarianism remains an open question. But if it does so to even a small extent, that fact alone might justify establishing a federalist system with strict limits on central government power - even if a unitary state would be preferable otherwise. The choice between unitary government and federalism is an important issue in many new democracies, including Iraq. In making their decision, they should take due account of Adolf Hitler's insight.