In The Federalist #10, what is James Madison talking about, which is a cornerstone to the governments of each states and its relationship to her citizens?

In the Federalist #10 James Madison discusses a concept called fiscal federalism, which is essentially the idea that the federal government should be taxing individuals, spending money as necessary and proper, and providing grants when necessary. He explains that this process is a cornerstone to the government's ability to maintain a relationship with citizens.

Madison is showing the superiority of a republic over a democracy.