So I was taking a photo of my daughter a few minutes ago. I used manual, pretty high ISO and I used manual flash at 1/128 power. On my preview it looked too bright for my taste. Then I changed the flash to E-TTL and kept the same shutter, aperture and ISO and the result was good. How come the ETTL can set the flash power lower than 1/128 power but I cant do it manually? 1/128 is as low I can go.
Basic answer to your question, the camera and flash are communicating with each other to produce the shot at set parameters. This communication provides a range of maximum power down as it sees fit.
You are not communicating with the flash. You are imputing designed parameters, full power, half power, 1/4 power etc. It would be excessively costly to put and external control for a human to dial up any power setting. That is what a light meter is for. Set two of the three parameters of the exposure triangle and it calculates the third parameter to get a proper exposure.