Formal regions are used to identify specific areas defined by a characteristic, like an ocean or continent, while functional regions are used to define areas containing a kind of service, such as cable television, or points on a map that are a terminals for an activity, such as travel or communication via telephone. For example, if people travel between Mexico City and New York City, the two cities may be defined as functional regions in relationship with each other. Functional and formal regions often overlap each other.
A formal region is used to describe a specific area that is defined by economics, physical properties, culture or government. Examples of formal regions are the United States, the Swiss Alps and the corn-growing areas in a specific area. These regions are often concrete and physical in nature with specific boundaries that set them apart from other regions in the world.
A functional region is in place for the sole purpose of a specific entity. For example, an electric company may set up regions throughout an area that makes it easier for them to service that area. These regions may change with time and often do not have physical barrier points.
A nodal region is another type of functional region. These regions are specific to one area. They are established when a relationship between two places, which become the nodal regions, is observed. For example, if 200 people traveled from Milwaukee to Australia every year, Milwaukee would be a U.S. nodal region, represented by a point on a map in a relationship with another nodal region, Australia.