Federated Architecture is a system design approach where multiple independent systems or subsystems collaborate to provide a unified functionality while maintaining their autonomy. This decentralized architecture is particularly useful in complex environments, such as multinational organizations or large-scale distributed systems, where individual systems need to operate independently yet share resources or data.

Core Principles:
1. Autonomy: Each subsystem retains control over its operations, data, and governance.
2. Interoperability: Systems are designed to communicate and work together seamlessly, often using standardized protocols or APIs.
3. Scalability: The architecture allows for incremental expansion by adding new subsystems without disrupting existing operations.

Applications:
- Enterprise IT Systems: Integrating various departmental software tools while allowing each department to
operate independently.
- Healthcare: Connecting hospitals, clinics, and labs under a unified health information network while retaining their separate databases.
- Cloud Computing: Enabling hybrid and multi-cloud environments where different providers collaborate to deliver services.

Advantages:
- Flexibility in development and deployment.
- Resilience through the independence of subsystems.
- Enhanced collaboration across diverse entities.

Challenges:
- Ensuring interoperability between heterogeneous systems.
- Managing security and compliance across decentralized components.
- Balancing autonomy with the need for coordination.

Federated architecture is a strategic approach that balances the benefits of centralization and decentralization, offering a flexible and robust solution for modern distributed systems.