In the X.Y.Z affair, these letters stood for: Three nations that secretly wanted independence.

Three French men that did not want to be named when they bribed US diplomats.

The early CIA and FBI operating in secret in Virginia and Georgia.

Three French men that did not want to be named when they bribed US diplomats.

Explanation:

As early as the autumn of 1796, the United States' relations with France began to deteriorate rapidly. After the unilateral dissolution of the Union with the United States in 1778, France began aggression against American merchants in the Caribbean and Atlantic. France's continuing aggression at sea and its apparent attempts to undermine American policy with revolutionary propaganda and bribery led the two great powers to declare war, especially at sea.

In May 1797, US President John Adams decided that, despite opposition from the Federalist Party, he would send three diplomats to Paris to seek a negotiated solution. Six months later, a message arrived in Philadelphia that the French foreign minister had informed American diplomats through intermediaries that negotiations could only take place if he was paid a solid sum.  The President published the delegation's report, in which the French agents were designated by the letters X, Y and Z (from which the informal name of the document and the entire incident came from), stirring up a storm of anti-French sentiment in American society.

Separation of powers limits government power by establishing checks and balances of power in the government, to prevent any one branch of government from taking over too much power.   Powers are separated between the executive, legislative, and judicial branches in government.

Context/detail:

The "Separation of Powers" principle was an idea embedded into the plans for American government by our founding fathers, based on their reading of Enlightenment political theory.  The terminology "separation of powers" was introduced by Charles-Louis de Secondat, the Baron of Montesquieu.  (Usually he's referred to as just "Montesquieu.")  He wrote an important work of political theory called The Spirit of the Laws, published in 1748.

Within his treatment of how governments will function best, Montesquieu argued that executive, legislative, and judicial functions of government ought to be divided between parts of the government, so that no one person or division of the government can infringe on the overall rights of others in the government or of the members of the society overall.