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The United Planets is a council formed of all major races in the galaxy that regularly convenes to make decisions. The amount of clout a race has in the council depends on their influence, which is partially a factor of population, but which is also affected by planetary improvements and race bonuses (among other factors).
The United Planets does not usually have a great effect on the game, but some of the propositions — for example, the transfer of unique researched technologies — can be extremely destabalizing if passed.
The player does have the option of leaving the United Planets, but only at the expense of losing all trade revenue.