The Federation due to scale HAS to be a weak central government, with strong "States". The Federation is just to big to run from 1 central place. 1000 light years across, that HUGE, Literally takes most of a year to transverse. Even if you do it over subspace, still takes days sometimes weeks to get a reply back. So it pretty much has to be a loose assembly of planets for it to work as a democratic system.
Actually, the UFP was stated in FC to stretch across 8000 Ly's of space.
As for distances and communications... UFP resolved that issue through use of subspace amplifiers.
Yes, some regions of UFP space do require subspace comms more time to reach them and get a response, but despite this, I don't think UFP relies on any typical governing bodies for planets to remain in UFP and abide by its rules.
If you recall, prospective member worlds need to meet a number of criteria to join the UFP (similar to prospective countries joining the EU).
Here's the thing though, once a planet satisfies those conditions for joining and the UFP reviews it (heavily scrutinizing) to make sure they did everything right to do so, and if the planet is accepted into UFP, there's hardly any big oversight needed for the planet in question to abide by UFP law, because they would have done so anyway.
As we saw, most individuals in UFP are educated to understand that they need to take responsibility for their own actions and UFP allows a planet to function under its own merit.
A SF presence is likely established in that system, such as a starbase, ship construction yards, educational faciities, etc. after joining, but they aren't necessarily there to enforce any rules... that's what the planetary government does on its own anyway because they had to implement various changes to qualify for joining.
SF is simply there to ensure protection, and enforce a few rules pertaining to when alien species or ships enter UFP space and provide aid if necessary.
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Now, we haven't heard of any "Regional Governors" or any type of "Lord" that is installed in charge of a species or planet system, they still have there own style of government, there own laws ( which is probably the same in general if your a member, think of the US, each state has its own laws, but in general 90% of the laws are the same country wide) If the planet or species whats to break from the Feds, they can, no one is holding a gun to there head.
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As far as I know, canonical data implies that 'lords' and such do not exist on UFP planets nor regional governors it seems. The planet needs to meet the criteria of having a unified globalized governing system that's inclusive, democratic and non-discriminatory to start with.
If a planet makes that transition successfully (and after heavy review), the UFP really has no need to enforce any oversight because majority of the rules UFP has would be part of the transitional process the prospective member planet is obliged to satisfy and implement in practice to become part of UFP in the first place.
My guess is that UFP has some updates in terms of certain rules/laws that need to be brought into action, but its usually ratified and implemented if most of the Federation votes positively on it.
If something doesn't really pass the voting from the large majority of the UFP public (such 80% to 90%... maybe 75% at a bare mininum) then I doubt it would be implemented.
Democracy can have its own pitfalls... I doubt the UFP would want anywhere close to 30-40% of the public not approving of a law to be put into practice.... this is why I think the overwhelming majority of UFP needs to pass something... akin to 85%-95% to minimize potential issues.
Now are most planets on some type of Socialism or Communism track? Yep. But the government owning everything isn't Fascist. Theres no bulldozing of opposition, no dictatorial leaders, no exhaulting the Federation over the individual, no one making people work. Almost NOTHING Federation is Fascist.
Do we even know if there is such a thing of government 'owning' anything inside UFP?
Given that there are conditions for joining the UFP (as I mentioned above), I think most of the views on 'ownership' would go down the hill if a planet makes a unanimous decision to join and implements all the measures to satisfy entry requirements.
In fact, besides SF answering to UFP council (which is comprised of planets representatives - and therefore enforce what the public wants), majority of things in UFP seem to be part of public domain.
Governments are in fact supposed to be the representative body of a group of people and implement their views into practice. In capitalsim, taxes from peoples wages are used (or are supposed to be used) as part of a government budget which should be used for infrastrucutre, betterment of living standards, etc.
Since I doubt money exists on most UFP member worlds, in this instance, I'd say the planetary government is there to simply ensure that the planetary resources are efficiently managed and distributed in a sustainable and public (and free) access to things such as education, medical care, basic goods and services (definition of which would likely encompass more and more things the more advanced a society is), pursuit of personal goals, happiness, etc.
I'm kinda repeating myself here with the UFP entry requirements, but mainly because those questions tend to connect to the same thing.