Meaning of defederalize

de•fed•er•al•ize

Pronunciation: (dē-fed'ur-u-līz"), [key]
— -ized, -iz•ing.
  1. to shift the functions or powers of (an agency, service, etc.) from the jurisdiction of the federal government to that of state or local government: to defederalize construction loans.
Random House Unabridged Dictionary, Copyright © 1997, by Random House, Inc., on Infoplease.