De facto, there were three sources of sovereignty when Lincoln entered office: the people, the States, and Washington, D.C. By 1863 there was only one.
In grade school we are commonly taught about the three branches of the federal government and the separation of powers. Typically we are provided with only a partial understanding of the essential nature of these powers and their separation. Rarely are we taught how this separation has been subverted in the course of our brief history. That we are even taught about the three sources of sovereignty is a matter of chance.
Initially there were three sovereigns: the people of each State both separately and together, each State as a sovereign political entity with its own militia, and the federal government whose powers were clearly enumerated in the US Constitution.
The relationship among these three sources of sovereignty requires study and a careful understanding of the three branches of government, the power of each branch, and how each branch is constituted. This understanding includes the power of each State, the power of the federal government over each State, and the ratification process by which the federal government was initially constituted as a source of sovereignty. A clear understanding of the 9th and 10th Amendments of the Bill of Rights is especially revealing in these regards.
Well before Lincoln the relationship between these sources of sovereignty were tested. Well-documented tests include the passage of the so-called Alien and Sedition Acts and the corresponding reaction to these manifested by the Kentucky and Virginia Resolutions of 1798.
In December 1814 just before the close of the War of 1812, our second war of independence from Great Britain, leading political figures from several New England States met secretly in Hartford, Connecticut to discuss not only a joint defense separate from that of the other States, but the possibility of separation (secession) from the United States altogether, if the federal government would not cooperate.
And, still again in 1832 when South Carolina threatened separation from the Union, if the Union sought to impose its will on the State for its rejection of unconstitutional tax legislation passed by Congress.
There are two important works that simplify to some extent the complex nature of American sovereignty. One is Alexis de Tocqueville's De la démocratie en Amérique. The other is John C. Calhoun's Fort Hill Address
( relevant excerpt ). Whereas De Tocqueville emphasized the relationship among the three sovereigns including the people, the States, and the federal government, John C. Calhoun focused more on the relationship between the various States and the federal government. Unfortunately, John C. Calhoun and his work have been vilified by our national media, our social media, and many prominent national and State politicians and academicians as a source of racial hatred, when, in fact, both the person and his work provide valuable insight into the nature of our founding quite apart from the issue of slavery.
Unlike the people of each State who were an amorphous political mass and required substantial effort to organize, their respective State governments were standing political bodies whose members were well versed in the art of governance and very familiar with the US Constitution. As the people of each State were sovereign unto themselves, their respective governments, both separately and together, formed an important external check on the federal government.
In time, political parties grew that traversed State lines, but these were more issue oriented, focused on particular political candidates, and could only truly exercise their power at election time. In contrast, the State governments were standing political bodies that could intervene in the goings-on of the federal government at any moment. This is because each State legislature could recall its representation in the US Senate without having to organize a State-wide election in order to do so. This too, changed after Lincoln's War of Consolidation with the introduction of the 17th Amendment introduced in 1912 and ratified in 1913 during the presidency of Woodrow Wilson.
No, the matter of nullification and secession was not so cut and dry as Andrew Jackson argued in his Proclamation against South Carolina's 1832 ordinance. This said, even if Andrew Jackson and later Abraham Lincoln were both correct in their determination that secession was a breach of contract and an offense against the people of the United States, each had the discretionary power to enforce or not enforce the breach in a manner that each saw fit. And, it is in this regard that Abraham Lincoln's decision to wage war is clearly in question. For, not only was he responsible for the loss of more than 600,000 lives, but he set aside the very law that he sought to enforce in order to quit the conflagration for which he was clearly responsible in victory. It is for this reason that his legacy is hardly worthy of the monument that was eventually erected in his honor.