The Unit of Analysis is the entity that frames what is being looked at in a study, or is the entity being studied as a whole, within which most factors of causality and change exist. The unit of analysis should not be confused with the unit of observation. The unit of observation is a subset of the unit of analysis. In social science research, the most commonly referenced unit of analysis, considered to be a society is the state (polity) (i.e. country). Common units of observation include groups, organizations, and institutions. The unit of observation is the unit described by one's data (neighborhoods using the U.S. Census, individuals using surveys, etc.). For example, a study may treat groups as a unit of observation with a country as the unit of analysis, drawing conclusions on group characteristics from data collected at the national level.
Dependency Theory and world-systems analysis challenged the treatment of countries as societies or units of analysis and the assumption that each country develops separately through stages from agrarian to industrial, from authoritarian to democratic, from backwards to advanced, by raising historical evidence. The development of an uneven division of labor (world-economy) shows factors of causality that account for changes within countries indicating that countries are part of a larger society or historical social system with systemic patterns that account for global inequality.
The literature of international relations provides a good example of units of analysis system.