Warning: Super long post. If you don't care about constitutional law and parliamentary procedure, don't read. If you want to learn more about the role of Head of State in Canada (which may apply to the argument here), read on! I wrote it for the average layman.
Note: All references to institutions and theories here can be credited to Political Scientist Donald Savoie and his writings.
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I'm Canadian, love Canadian politics (which I study), and aspire for a career in the Canadian Public Administration. As such, I can relay a few theories about the Canadian Head of State, the Governor General, whom wields all of the Queen's powers with respect to Canada since the Balfour and Statute of Westminster declarations in the early 1900s. Maybe it can contribute to the discussion about Heads of State in general.
Now, then... Anyone who knows a little bit about Political Science regarding the Westminster System of government knows that the government of a state consists of, typically, a Parliament (composed of the cabinet, the executive; the house of commons, the legislature; and the senate, the other legislature) and a Governor General (along with the courts and other institutions, but let's not get into that here).
A bit of background: Parliament has ceased to function in its theoretical way. Given a majority government, a Prime Minister (hereby "PM") in control of more than half the seats can use his party whips to keep all his party's members of parliament (MPs), which constitute the majority of voters in line and basically ram legislation through the institution without real input from the opposition, because most anything passed in parliament only requires majority support to be legislated. Theoretically, the opposition and the government MPs should be able to say "Hey, wait a minute. My constituents don't like that." And debate/discuss/compromise. But in the advent of various factors (like party loyalty, PM-MP patronage to higher paying positions, the threat to prevent the member from running again next election, the fact that elections are primarily based on leadership images of party leaders/potential PMs, etc) government MPs tend to be cowed and obey the PM.
So, briefly put: The Prime Minister holds allot of power. Cabinet is meant to be a round-table discussion, but that, too, is a farce, at least in Canada, and I will gladly talk about it if asked, but want to get on with the real point:
How does this relate to the Governor General/Head of State?
Constitutionally written, as in, as written on old pieces of constitutional law paper, the Governor General wields dictatorial power in Canada (just as the Queen can wield it in Britain, unless they amended that. As I said, I only know Canadian politics very well). Why? Because the constitution says so. Canada was once a colony, and the Governor General was the Queen's representative. And the Queen had real power back then, so naturally, the Governor General did too.
But the constitution also relies on conventions. Conventions are basically unwritten parts of the constitution, that follow a "Well, it says that, but we'll sorta do it this way.. and.. see? It works well. Let's do that for a while..." and then a while passes, say twenty years, at which point every political actor knows that, even though the constitution doesn't say it, what has been done for the past twenty years is the way it goes.
With regards to the Governor General/Head of State in Canada: This line is very blurry. Some people say that because he or she is not elected, she cannot do anything legit. Ever since the King/Byng affair (see below/on wikipedia), the GG position was - in the unwritten, conventional sense - greatly reduced in credibility by the public, and thus also its power. She's just a "rubber stamp" since then, as the saying goes. But...
Some say that, given very particular circumstances, the GG (abbreviated Governor General hereon in) can withhold ascent to legislation that is a clear abuse of Prime Ministerial power.
For instance, let's say PM wants to ram legislation through the parliament without debate, but unfortunately has a minority government. In theory, the PM will compromise with the opposition parties, if need be, the opposition can form an alternative coalition government as per parliamentary law. But in practice, the minority government PM can call elections at will by abusing the confidence convention (introduce your plans/budget, have them voted down upon, and then according to law an election must be called). And he has the PMO office to help him run those elections - he has the government staff - he has the power seat and the plan - and people generally dislike constant switching too often between parties in Canada (it's just been the trend these days). These elections can land him or her a majority government and screw the parliamentary system over.
Constitutionally, the GG can stop all that from happening if it's about a very crucial, important issue, or if the PM is doing something highly illegal, or whatnot. Because he/she is the stamp of approval on ALL legislation. Constitutionally, the PM makes policy, then "advises" the GG. So the GG can just say, "No, I don't like that," as per written constitution.
It's not the most effective check, but it's one that Canadians have... in theory... it hasn't been used in practice--yet. However, constitutional lawyers and political scientists advocate that in dire straights, the GG can wield these sorts of written powers regardless of the vague conventions--to say: "No, get back in your office and govern with the opposition. Do your job according to the law. Don't try to screw the system. Go back and face your opponents in parliament." For a really interesting story on this happening, check the King/Byng affair on Wikipedia (a situation where the GG was fired because he did his job). Constitutional crises are entertaining.
Moreover, if the PM dies, the GG alone is the one to name a clear replacement--an interim PM--during which new elections are to be organized.
So... as you can see, I like the GG position. It can wield one or two very important powers, in the Canadian system at least.
The irony is that the democratically elected PM is the least democratic--in terms of checks and balances and the separation of power--of all institutions in Canada. If viewed from the cold standpoint of mere institutional influence, the power is wholly concentrated on the office of the Prime Minister, given a majority government. It's like a "friendly dictatorship." He/she can dole out patronage/rewards to cow MPs into running legislation that he approves of. And the undemocratically obtained, nominated position of the Governor General, is in fact one of few democratic checks and balances ("go back and compromise with the other representatives!") to the democratically elected, yet undemocratically powerful, Prime Minister.
TL;DR - Uh. Governor Genereal/Head of State in Canada's power scope is blurry due to vague constitutional conventions but law professors/political scientists argue it does have power in certain situations.
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The Royal Family is still in the Spotlights, although the Prime Minister and his party make up all the rules and decide what to do.