Germany has a long and strong federal tradition dating back many centuries to the early Middle Ages. When the modern nation state of Germany was established in 1871, this tradition was built up upon and granted the individual member states a lot of competencies and prerogatives, whereas the imperial government had relatively little powers, at least going by the constitution as written. German constitutional tradition divides legislation into three areas: imperial/federal (as in the exclusive domain of the imperial/federal government), federal (i.e. the individual states can exert autonomy in this area) and the so-called "concurrent legislation", where the states can enact legislation but the imperial/federal government can do so likewise if it wants or if certain conditions are met which then supersedes state-level laws.

Germany constitutional history also traditionally divides parliament into two chambers: the "Reichstag" or "Bundestag" is an elected parliament of representatives from all over the country, whereas the "Reichsrat"/"Bundesrat" is an assembly of delegates sent by the various member states. Its exact power and competencies varied throughout modern German history, but at the very least it always possessed the power of veto against legislation brought forth by the Reichstag/Bundestag.

In the specific case of the Weimar Republic, the powers of the imperial government grew considerably in comparison to what it had had before, at least legally speaking. The concurrent legislation was extended to cover many other domains, most importantly taxation - the imperial government was now for the first time in the position to finance itself instead of being dependent on money sent by the states. At the same time, the Reichsrat lost a lot of its power - while it retained its veto power, it lost the ability to independently introduce bills.

At the same time, the Free State of Prussia was by far the largest member state of them all, accounting for more than half of the republic's population and almost two-thirds of its territory. This naturally afforded the Prussian government an extremely important role within the larger framework of the German republic, not only in terms of hard legal power (it actually had to be curtailed by the constitution: going by "normal" rules, Prussia would have utterly dominated the Reichsrat, but the constitution stipulated that any one member state might at most make up two fifths of it), but also in other and more indirect terms like the majority of Reichstag members and also cabinet ministers coming from Prussia, much of the nation's economic power being concentrated in a single state and so on.

In 1932, this Prussian predominance came to an end when the imperial government under chancellor von Papen essentially orchestrated a coup and removed the state government with the aim of ultimately getting rid of what they saw as a flawed federal system that was in the way of Germany regaining its former glory. After 1933, the Nazis continued the dismantling of Prussia, and by the mid-30s it had effectively ceased to exist. In that sense the Allies only translated reality into law when they formally put an end to Prussian existence in 1946.

To sum up: the Weimar constitution gave the various member states a lot of autonomy in certain areas of legislation and policy, even though this autonomy was severely curtailed in comparison to before WW1. Owing to its sheer size, Prussia naturally dominated the political and cultural landscape of Germany, which gave its government greater sway within the republic than those of other, smaller states. Yet (or more precisely: because of that) it was effectively abolished as an actor of its own and placed under imperial control even before the Nazis came to power, so depending on when you are speaking of, Prussia was both autonomous and "just a territory".