Okay...a lot of us seem to play in the DS9/post-DS9 period. My campaign started about a year after the show wrapped and has now arrived at the year 2382.
When I got talked into running this game I was far from a Trek fan. I liked most of the movies, TNG, and that was that, for me. My group had a bunch of Trek fans, and I had bought the books 'cause they looked nice (and I got a bunch of freebies from S. John Ross -- the greatest kinda-Texican gamer guy around), so I studied up a bit on the DS9 series and set down some ground rules.
The Federation was the shiny, happy place we see on TV -- but only on the surface. Underneath the platitudes, people were still driven by real emotion and self-interest. I based the government and economic systems on the Soviet Union, with some modifications from othe socialist countries in Europe: it's big, unweildy, and a lot of the branches don't talk to one another. Outside of Starfleet, the Federation is pretty unresponsive. It is, by the stuff in the Price of Freedom, barely a republic; the Federation Council is a bunch of appointees from planetary governments, who elect the executive branch on their own; there is little incentive for professional politicians with this sort of power to bend to the whims of a minority (i.e. the Maquis). There is a two-prong economy -- one of replicators and communistic power/replication rations, the other is the credit system that is used to trade between planets and other stellar powers.
Throughout the campaign, we have seen a steady disintegration of the Federation's effectiveness -- symptomatic in their piss-poor ability to handle things like the Klingon and Dominion War, but also in events like the Baku incident. The government does what it wants and after giving lip service to personal freedoms and local autonomy, it runs roughshod over them when planets and people go against Federation policy. Several presidents have been removed by vote of no confidence -- mostly due to backdoor deals that have profited them and their administration. Terrorist groups and planet's rights groups are bustin' out all over. They were given a real impetus when it was discovered the key race of the Federation...the Vulcans...were imprisoning political subversives (Sybokites and the VIM) and attempting forced reprogramming to the teachings of Surak. (What can I say..? I like the Enterprise version of the Vulcans -- I've always thought them supercillious poseurs...)
In 2379, it was discovered the Federation was broke! A massive trade deficit with key member worlds -- Andor and Bolarus IX -- had drained off much of the trade capital of the UFP. To make matters worse, the core worlds are experiencing some trouble with manufacturing enough power to keep the huge amount of replicator/transporter/computer usage going. Even antimatter power production has limits...and think of the amount of heat created by power usage like that...with populations in the 10s of billions, the core worlds are beginning to slowly, but surely, see climactic impacts on their worlds. (Thus the constant need to colonize and push outward, in addition to overpopulation.)
Sensing weakness the combined forces of the Orion and the Ferengi moved to put out massive propoganda campaigns vs. the Fed, and backed the groups that were increasingly unsatisfied with the way Paris was lording over the whole Federation. Betazed, still ticked from being left to rot during the war (their opinion), seceded from the union. It was followed by several smaller worlds who were able to buy their protection from the Ferengi or Orions. The UFP, crippled by economic problems many could not understand (we use money..? I thought the replicators just spit the stuff out for us and that was it...), let the rebel worlds go, instead of trying to mobilize against them.
In 2380, the Orion Confederation and the Ferengi joined with several smaller stellar powers and rogue houses of the KLingon Empire, looking to unseat Chancellor Martok, went to war against the Federation. conflict in the Orion Corridor -- the space beyond Betelgeuse -- was swift and brutal. By the time the Starfleet could move reinforcements to back the decimated fleets out of Betelgeuse and Sherman's Planet, the UFP had negotiated an armistice.
We now see a sudden shift from a centralized government in Paris, to a weaker Federation with the worlds gaining more direct representation and more autonomy. Some of the core worlds, like Andor, have had theri own military forces for some time...this is now becoming an even more common occurance. The comfort of Federation citizens is still assured by the replicator technology, but the acquisition of wealth is now posible against as the Fed economy returns to mometary-based systems -- the credit, backed by latinum deposits. Central to the powers of the Federation are defense and interstellar trade -- the Starfleet remains an entity removed from planetary politics (or so they think).
Through massive changes, the sudden lack of Federation legal imposition on the local worlds is much lessened and the cultural diversity of the UFP is increasing. The ability of people to seek happiness not just through politically correct ideas of science and art has widened...it includes greed, but we saw plenty of that anyway.
The big conflict now is the fight between the Federation bureaucracy (not the council) and the local governments. Now only does the bureaucracy not want to lose its power, but they think their ideology is RIGHT...facts not withstanding.
For the Starfleet guys, there's no real change in their lifestyle...save they get paid. But it represents a whole new thinking -- still utopian, but with much more realpolitik involved.
Okay...comments?
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. After all, if we have no trouble with transporters or warp travel, we can admit a huge yet quite efficient interplanetary government, can we 
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