an example of Federalism is as follows our central government can issue passports and our state government issue a driver's license

A federal government consists on a division of powers between a central, national government and smaller local governments in each of the states belonging to a country. In this division, roles of power and functions are shared between those two, but there are also different roles that each government are allowed to undertake. Given this definition, the statement is true. Due to the splitting of responsibilities in a federal government, issuing passports could be a matter of national concern (the national government is interested in knowing how many people are leaving the country and who these people are for national safety reasons) and a driver's license could be a matter of local interest (getting statistic knowledge of how many people drive in your community).