hmmm. resort to wikipedia here -
In a federation the component states are in some sense sovereign, insofar as certain powers are reserved to them that may not be exercised by the central government. However, a federation is more than a mere loose alliance of independent states. The component states of a federation usually possess no powers in relation to foreign policy, and so they enjoy no independent status under international law. However, German Lander do have this power, which is beginning to be exercised on a European level.
Some federations are called asymmetric because some states have more autonomy than others. An example of such a federation is Malaysia, in which Sarawak and Sabah entered the federation on different terms and conditions from the states of Peninsular Malaysia.
A confederation (or confederacy), in modern political terms, is a permanent union of political units for common action in relation to other units. Usually created by treaty but often later adopting a common constitution, confederations tend to be established for dealing with critical issues (such as defense, foreign affairs, or a common currency), with the central government being required to provide support for all members.
The nature of the relationship among the states constituting a confederation varies considerably. Likewise, the relationship between the member states, the central government, and the distribution of powers among them is highly variable. Some looser confederations are similar to intergovernmental organizations, while tighter confederations may resemble federations.
so, most anarchists i would assume, would prefer confederating to federating. but there is plenty of confusion about the differences between the two.
not a particularly interesting answer. :(
i guess the point for anarchists is that these are fairly technical terms, that imply relationships of a particular nature, and therefore are not necessarily relevant to anarchists at all (despite being used aplenty by some branches of the anarchist tree).