This also goes for the other German nations like Saxony.
The Kaiserreich of 1871 was a federal union of various states and free cities, some of which were quite large and others not so much- see this map. The 1871 constitution in theory provided for a combination of mass democracy like universal suffrage and a national parliament, but also aimed at the preservation of local privileges. For the German states that agreed to the constitution like Bavaria this meant the monarchy retained a degree of latitude in this system. The various German monarchies maintained elements of their own sovereignty such as their own war ministries, but recognized Prussian/Hohenzollern hegemony in matters like supreme command or foreign relations.
Votes for the national parliament, the Reichstag, were based off of universal male suffrage, and showed how chaotic and unpredictable this system could become. Bismarck had intended this system to deprive Liberals an issue in the thought that the the bulk of the German population would vote conservative. Bismarck underestimated the explosive growth of industrialization and the rise of German metropolises. Systems of indirect voting that privileged tax brackets (titles had little to do with voting) like the Prussian three-class voting were not uncommon on the state level. The tiered franchise was something of a democratic innovation in the nineteenth century when it was introduced in the aftermath of 1848; the state was acknowledging that its subjects had a stake in the government. But by the twentieth century this system appeared archaic. The southern German states (Baden, Bavaria, and Württemberg) had actually instituted universal suffrage in state electoral reforms of 1904-06. Prussia was the main hold out, but the explosive growth of Berlin made the prospects of Prussia being a stronghold for conservative Junker interests increasingly tenuous even with the tiered-franchise. Furthermore, the very existence of the tiered franchise provided Germany's left-wing political parties a viable issue with which to attack the government.
Bismarck had designed the executive branch of government to be independent of parliamentary oversight. The chancellor was appointed by the Kaiser as were the various ministers and higher civil service. Despite this, both Bismarck and his successors found that executive independence was far harder to achieve in practice. The Reichstag gradually discovered that it had the power of the budget, especially during the Septennat (the seven year military budget). This forced the executive branch to deal with parliamentary leaders lest there be a budget crisis. This is part of the reason why Bülow in 1903 backed Catholic Centre Party's calls for private ballots for federal elections despite the wishes of his conservative Protestant base which held the Centre as a political enemy.
A number of contemporaries, including President Grant, likened the 1871 system to the US federal model with states like Bavaria acting as stand-ins for US states like Texas and their monarchs being governors. But comparing the federal states to American states confuses more than enlightens. There is a degree of uniformity in American local government (democratically elected executive, legislature, state constitutions) that Imperial Germany's federation of kingdoms and free cities did not posses. The governments of the Länder had different patterns of local government that varied widely between 1871-1918. Hamburg, for example, was a stronghold for German liberalism in 1871, but the rise of the SPD meant that its urban notables erected various electoral barriers to cement their hold on local power. Saxony enacted reforms towards universal suffrage, but also instituted residency qualifications to restrict suffrage. There are also further differences. For example, the German princes of these states had a permanent forum, Bundesrat, that has no analogue in the American federal system. The Bundesrat could not be dissolved by order of the Kaiser (unlike the Reichstag) and this forced the central government to negotiate with it. The periods of budget negotiations were particularly tense as the federal states under the constitution had to chip in to cover any shortfalls (which is a very different thing in American budgets!) and thus the Bundesrat never acted as the pliant intermediary Bismarck had intended it to be.
One of the crucial features of Imperial Germany was that it was a federal state that combined multiple German polities into a executive that was dominated by Prussia. This meant that the 27 Bundesstaaten managed to possess a degree of local political and cultural autonomy within the imperial structure. This was in part by design of Bismarck and the Hohenzollerns to create a unified state with relatively little disruption of institutions. On one hand, such continuity of government buttressed the conservative nature of the pre-unificaton states and lessened the friction of the various state elites in accepting the Hohenzollern/Prussian leadership. Yet beyond such political benefits, this federal structure also dovetailed with the neo-feudal ideas that had taken hold in the Hohenzollern court in which the Kaiser would form a band of German brothers with his fellow monarchs and fashion an alternative to republican modernity.
This relative independence meant that intense cultural localism and particularism continued in the various German states. Heimat (no real translation- homeland conveys the best meaning of the word) became an important cultural feature and local celebrations often eclipsed national ones. Many of the Kaiserreich's attempts to craft a new universal culture fell flat outside of the core Prussian territories. Sedan Day, for example, was seldom a very popular in Catholic areas and Kaiser Wilhelm I soon lost his appeal as a universalizing monarch in light of the Kulturkampf. Yet, the development of infrastructure, the encroaching advance of modernity, and universal education also created a national German mass culture. In this context, localism in Germany often became a symbol of German national identity; the fact that "Germany" existed because of this diversity rather than in spite of it became major feature in German national identity and a emerged as a viable alternative to the bombastic Hohenzollern hot-house nationalism. To paraphrase Alon Confino, the nation became more intelligible and powerful when it was understood as a local metaphor.
The legacy of this bifurcated national identity is still very much in evidence today in Germany. Heimat films or tourist destinations like Rothenburg ob der Tauber peddle a form of localist kitsch that is marketed as distinctly German. Placing the local before the national or vice-versa is something of a set of false alternative as they obscure the often hybrid nature of national identity. As paradoxical as it sounds, localism is not necessarily antithetical to a greater sense of nationhood, as the German case shows.
Sources
Aaslestad, Katherine. Place and Politics: Local Identity, Civic Culture, and German Nationalism in North Germany During the Revolutionary Era. Leiden: Brill, 2005.
Bennette, Rebecca Ayako. Fighting for the Soul of Germany The Catholic Struggle for Inclusion After Unification. Cambridge, Mass: Harvard University Press, 2012.
Berger, Stefan. The Search for Normality: National Identity and Historical Consciousness in Germany Since 1800. Providence: Berghahn Books, 1997.
_..Inventing the Nation: Germany. London: Arnold, 2004.
Confino, Alon. The Nation As a Local Metaphor Württemberg, Imperial Germany, and National Memory, 1871-1918. Chapel Hill: University of North Carolina Press, 1997.