Monarchies often derive their power from the
Divine Right Of Kings.
This led to problems when ruling a country that wasn't doing too well. If God says who should be the monarch, then why is the country failing under this monarch?
In many modern monarchies the government holds all the power (pretty much) and the monarch is there mainly for sentimental/constitutional value (and to save a huge rewrite/rethink of the constitution). This is the case in Great Britain. The monarch can do very little as far as running the country is concerned. Theoretically, the Queen can do many things such as call a war but these powers have now been handed down to the Prime Minister and Parliament. These powers are called Royal Prerogative powers.
don't know whether this is the name elsewhere