The best explanation I’ve seen is that federation is like email. If you have Gmail and send an email to a Hotmail address, a copy of the message is stored on both servers. When the Hotmail address replies, both servers are updated with the Hotmail’s contents. If you reply all to your own message, both servers are updated with Gmail’s contents. If Hotmail ever decided to refuse Gmail messages, Gmail would retain all the previous Hotmail content that had been sent.

Contrast this with Reddit, where they control everything in all communities.