In a federal system of government, power is divided between the central government and the state or local governments. The legislative power is the ability to make laws.

Option 1: The central government exercising legislative power over the Union List is correctly matched. The Union List includes subjects on which only the central government can legislate.

Option 2: The pairing of local government with residuary powers is incorrectly matched. Residuary powers refer to the powers that are not specifically mentioned in any list and are therefore retained by the central government. Local governments have limited legislative power and primarily deal with matters related to their respective jurisdictions, such as local governance and administration.

Option 3: The state governments exercising legislative power over the State List is correctly matched. The State List includes subjects on which only state governments can legislate, such as police, public order, and agriculture.

Option 4: The pairing of central and state governments with the Concurrent List is correctly matched. The Concurrent List includes subjects on which both the central and state governments can legislate, such as criminal law, marriage, and divorce.

Hence, option 2 is not correctly matched as local government is not associated with residuary powers.