Answer: C is correct.
Explanation: in confederation states maintain their independence and central power is quite week (its powers are limited). In federation, states have certain autonomy (defined in the constitution). In federation power is divided among several elements (member states of the federation and the federal government) but none of these elements cannot decide to leave the federation, i.e. their powers are limited. Federal arrangement is not the same as decentralized unitary state (Spain, Italy, UK).