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According to the Constitution, all public power (executive, legislative and judicial) is created and commanded by the Queen. The Prime Minister is, in theory, a counsellor who advises her. In practice, it is a more complex situation, because the UK is a democracy, so public will must be law. So, more or less, the Prime Minister and the Cabinet take the executive decisions, but it is the Queen, through the Privy Council, who makes those decisions effective. She is not forced to accept all ministerial decisions, this is why she meets the Prime Minister once a week to discuss matters of State and advise him. This is the reason why the Executive is called Her Majesty's Government, to indicate it is her who governs and has the power, not the ministers. Nowadays the UK is a strong democracy, so the Queen will only interfere when the Government behave improperly.

Now, taking into the account the prime minister is appointed by the Queen and the Queen is also the head of Parliament and Courts, she has more authority than the PM.
In the United Kingdom, it might seem that the Queen is just a figurehead which is contrary to the realism of British politics. The Prime Minister is the head of "Her Majesty's Government. According to the constitution, the Queen has the power to:

to dismiss and appoint a Prime Minister (she may choose a Prime Minister of her own choice, though nominally she appoints the individual most capable of commanding the House of Commons); to dismiss and appoint other ministers; to summon, prorogue and dissolve Parliament; to grant or refuse Royal Assent to bills (making them valid and law; to commission officers in the Armed Forces; to command the Armed Forces of the United Kingdom; to appoint members to the Queen's Council; to issue and withdraw passports; to grant Prerogative of mercy (though Capital Punishment is abolished, this power is still used to remedy errors in sentence calculation); to grant honors; to create corporations via Royal Charter. She also has the power to shape foreign policy by: the power to ratify and make treaties; to declare War and Peace; to deploy the Armed Forces overseas; to recognize states; to credit and receive diplomats

Even though the United Kingdom has no single constitution document, in October 2003, in order to keep themselves more transparent, the Government published the above list as the monarchs powers.

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