History
Officially known as the Confederation of Independent Colonies, the Colonials historically developed as a splinter of the Earth Federacy. Over time, their more open and tolerant policies as a loose confederation rather than a close federal government meant that over time more colonies joined the Confederation than remained with Earth.
Despite several wars, they were able to maintain independence from the Earth Federacy until the arrival of outside threats that forced the Earth-Colonial Alliance and the eventual reunification under the Human Strategic Commonwealth.
Society
The Confederation has generally been very tolerant of disparate societies under their common defence pact. Planets and nations are allowed to make their own laws and function as governments within an alliance. The Council of Colonies is made up of representatives from each independent colony, emphasizing regional rather than population representation, and what laws are made are generally to deal with inter-colony affairs. Interestingly, it has also been possible for a colony to leave the Confederation peacefully. Membership is considered voluntary, though joining, taking advantage of some benefit and then leaving generally leads to demands for compensation, censure, or sanctions.
Many colonies have historically not been democratic at all. As long as they follow the edicts of the Council, this has not been considered an issue, as the libertarian stream of thought dominating the formation of the Confederation included a strong basis in the principle of market competition. One of the few requirements that the Confederation has historically placed on colonies is freedom of movement between colonies, both for trade, and for immigration. Pro-democracy movements within the Confederation have generally been appeased with the argument that any superior democracy should see significant immigration, and authoritarian regimes, if they are in fact worse, have an incentive to democratize.
This laissez faire attitude was and is still common among Colonials. Religions and cultures are tolerated, but not preferred, and generally a market of ideas is considered the ideal. In many ways the CIC most closely resembles the early ideals of the United States of America, except taken to a classically liberal extreme. Rand and Heinlein would be proud.
Otherwise, they are very pragmatic, with a strong utilitarian streak. The needs of survival in space tend to trump anything else.
Military
Military forces of the Confederation are generally Colonial Militias of individual colonies. There has never been a standing fleet of the Confederation per se. Rather, during times of crisis, individual colonies lend what forces they are willing to. Often, forces must be bought, and hiring mercenaries are not uncommon. Large corporations have often operated fleets to defend their holdings.
Given such variety, it is hard to say what stands out about the Colonials. In general though, they do tend to have more extremes in quality, with some militias being comparable to elite Federacy and Imperium units, while others are laughable. Among the best, the Colonials are noted for excellent Spatial awareness in the 3D, due to larger number of Spacers (those born and living in space), and the larger percentage of harsh condition planets also means better environmental competencies.
That being said, their lack of cohesion can be a weakness, and Colonial Militias have been known to retreat rather than risk their lives to hold a line. They are also known to fight far more fiercely when defending their colonies or retaliating for some transgression. The CIC has historically been impossible to conquer, but also failed miserably at full out invasions, and the undisciplined forces have been implicated in many massacres and pillagings.
It is also believed that significant portions of the Militias have tended to become pirates and privateers in peacetime, and a disproportionate number of pirates are believed to have been Colonials.