An associated state is the minor partner in a formal, free relationship between a political territory with a degree of statehood and a (usually larger) nation, for which no other specific term, such as protectorate, is adopted. The details of such "free association" are contained in a Compact of Free Association or Associated Statehood Act and are specific to the countries involved.
All free associated states either are independent (with status of subject of international law) or have the potential right to independence.
Informally it can be considered more widely: from a post-colonial form of amical protection, or protectorate, to confederation of unequal members when the lesser partner(s) delegate to the major one (often the former colonial power) some authority normally exclusively retained by a self-governing state, often in such fields as defence and foreign relations, while often enjoying favorable economic terms such as market access.
A federacy, a type of government where at least one of the subunits in an otherwise unitary state enjoys autonomy like a subunit within a federation, is similar to an associated state, with such subunit(s) having considerable independence in internal issues, except foreign affairs and defense. Yet in terms of international law it is a completely different situation because the subunits are not independent international entities and have no potential right to independence.