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The Union was one of several governments, including the Draconian Republic, the Cyberlord Hegemony, and the Sontaran Empire, that divided the Mutter's Spiral (PROSE: The Crystal Bucephalus) circa the eleventh millennium. (PROSE: The Quantum Archangel)
The Union was formed after the Federation civil war, and the Union Presidium was located on Maradnias, with senators from the Ice Warriors and Alpha Centaurans. The Crystal Bucephalus was used as an unofficial parliament for the Union, the Lazarus Intent, and the Elective, with ran all brothels, drug dens, and gambling establishments in the Union.
Diadem, considered the most relaxing planet in the galaxy, was mined out by the Union for its jethrik and trisilicate.
The Fifth Doctor told Sven Tornqvist that the Union was due to fall in under 100 years, to be replaced by the Junta, a military dictatorship originating with the Elective, which would, in turn, be replaced after 1000 years by the Confederation. However, he later admitted that he made some of it up. (PROSE: The Crystal Bucephalus)