The North German Federation is the decision to form 
North German Federation.
The requirements are that the forming Country has North German as primary culture, and own or sphere all the provinces with North German Federation cores.
It also requires that the forming country has at least 45 prestige and is a Great Power.
Prussia is at the beginning of the game very close to being able to take this decision. It only lack 
Saxony, 
Hannover, and 
Holstein.