Yes, CONFEDERACY is a Scrabble word!

Letter values in Scrabble US: C 3, O 1, N 1, F 4, E 1, D 2, E 1, R 1, A 1, C 3, Y 4.

Is it a valid word?

CONFEDERACY is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

the southern states that seceded from the United States in 1861
a union of political organizations
a group of conspirators banded together to achieve some harmful or illegal purpose
a secret agreement between two or more people to perform an unlawful act

Also: confederate states, confederate states of america.

Not playable in Scrabble US: DIXIE, DIXIELAND.