So, I’m connected to a fancy computer called a server, and so are you, but we’re connected to different servers. The reason we can still talk is that despite being on different servers run by different people, those people have made it so that the servers can share what I say with you, and what you say with me.

Federation is simply a fancy term for an agreement to share something. In this case, it’s our text posts.

There are other kinds of federation, but that’s not important to Lemmy. Since you asked specifically about Lemmy, I’ll leave it at that.