A federal capital is a political entity that is or surrounds the capital city of a federal state. In countries with federal constitutions, power is divided between that of subnational states and a federal government. The seat of the federal government is in these states is located in a separate political entity, the federal capital, which normally encompasses one major city and its surrounding areas. These federal capitals may be considered states in themselves, and exercise significant political autonomy. The purpose of having a federal capital is to ensure no state enjoys political dominance over another, but remain of equal importance.
Examples of well known federal capitals include Washington, D.C., which is not part of any U.S. state but borders Maryland and Virginia; Berlin, which is a state of Germany in its own right and forms an enclave within the much larger state of Brandenburg; and the Australian Capital Territory, a territory of Australia which includes the capital city of Australia, Canberra.