This is a form of government in which the member regions form a loose association in order to create a nation, but by law they have more power than the national government.

I believe the answer is: C onfederal

In a C onfederal form of government, the federal government only took a role as an assistant rather than a regulator.

Which means that if the rules that created by the confederate states contradict the rules that created by the federal government, the states have the right to override the federal government.