defederalize

de- +‎ federalize

defederalize (third-person singular simple present defederalizes, present participle defederalizing, simple past and past participle defederalized)

1. (transitive) To remove from federal government.
   • 1989, Ray C. Rist, Policy Issues for The 1990's, page 126:

     The Reagan strategy to defederalize American health care consisted of three general lines of attack that, if fully accepted and implemented, would indeed have shriveled the involvement of the central government in the system.

• defederalization