union of sovereign states linked by treaties, whose common government does not directly exercise its sovereignty over their territory
A confederation is a group of countries that, by treaty, have given some of their powers to a central government. They do this in order to coordinate their actions in a number of areas. This is like a federation, but without the association being a new country.
A confederation is not the same as a federation, but they have a similarity. A confederation is a group of countries, a federation is a country.
The only example today is the European Union. Switzerland has the Latin name Confœderatio Helvetica, although it is not a confederation in this sense, but a federation.