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The government of the Third Reich evolved and subverted the institutions of the parliamentary Weimar Republic established in 1919.
Before the ascension of the Nazi party in January 1933 the legislative branch of the government was comprised of the Reichsrat, representing the various Länder (German states) and the Reichstag, a parliament elected according to a system of proportional representation.
As soon as Hitler gained power he began undermining the power of these branches of government and working towards a centralist, totalitarian dictatorship. These changes occurred incrementally:
So by 1938 local and state governments were controlled by Nazi Party leaders, known as Gauleiters. The central government itself was made up of competing, overlapping power structures all vying for personal power. The result was a convoluted and often divided administration with a tendency to implement the more radical and extreme elements of Hitler's ideology in order to gain favour with Hitler. They called it "working toward the Fuehrer." Because there was such competition to win favor (and power) by anticipating and implementing the Fuehrer's will, a process of "progressive radicalization" ensued.
To say that something like the Final Solution unfolded because the system was geared for progressively radical solutions to be dreamed up and tried out is called "functionalism" or "structuralism". When looking from a systems perspective, it is easy to overlook the fact that Hitler did stand at the top and that the Nazis had an ideology or "worldview". When you look at Mein Kampf and the Secret Book and look at how events unfolded, you can see enough correlation to think that Hitler was indeed masterminding the whole thing, and that all unfolded through Hitler pulling the puppet strings. Quite a fair amount of that happened. There was no progressive radicalization without the Fuehrer's approval. If you put Hitler's will and ideology at the top of the causal chain, that is "intentionalism".
There are two opposing opinions on the efficacy of this system (from Hitler's perspective). 'Intentionalists' believe Hitler created that system to ensure the total loyalty and deduction of his supporters and prevent conspiracy and betrayal. 'Structuralists' believe that the system evolved by itself and limited Hitler's totalitarian power. Now we know that the Nazi regime was a bit of both.
Source: Nazi Germany: Administration on Wikipedia