The ACT embraces, to an unusual extent, different even contradictory principles. As a city-state, its institutions combine the roles of local and state government. It adheres to the Westminster system with its division of powers between the legislature and the branches, yet the division is somewhat fluid, and the structure is in some respects municipalised. The ACT also operates as the capital city for the Australian nation, which entails shared responsibilities with the Commonwealth for some purposes; retention of the status of a territory rather than a state within the federation and recognition of municipal functions but not local governance. This unlikely fusion of elements has been argued to produce a hybrid system of governance, which makes for tensions between principles of governance and a mix of opportunities and challenges including questions of capacity that derive from both the scale and the organisation of government.