I think of it like this

Let's say 3 families each have a magic book they can use to communicate with each other. Anything someone writes in one book appears in all 3 books.

Each book is a Lemmy instance. In the real world it would be a server running the Lemmy software.

The family members are the users of each Lemmy instance.

And the spell that binds the books together is federation.

Now let's say family 1 and 3 have a falling out and break the spell connecting their books. That's defederation.

Everything they wrote in the books before then is still there. But nothing they write going forward will sync to each other's book. They can both still see and write on family 2's pages, but won't be able to see what each other write. Family 2 can still see all of both of what of them are writing because he's still federated with them both.

Now let's add some of the other fediverse services into the mix. Lets say mastodon, it works pretty much the same way, but instead of a book, let's say it's more like a stack of index cards, but otherwise you can see whats in everyone else's stack of cards as long as you're federated with them.

Most of the fediverse services federate to some extent or another with the other services. It can be a bit weird sometimes, index cards of course wouldn't have a page number in the book, and pages in the book wouldn't be indexed in the card catalog, so searching out the content from those other services can be a little wonky, but if you know where to look you can find those cards tucked into your book, or a crumpled up page from a book tucked into your card catalog, and you can interact with them, so you'll sometimes see, for example, someone from a mastodon instance commenting on a Lemmy post, which is kind of like taping one of their index cards to the page of your book to leave a comment.