United Kingdom

That's okay, it can be a little hard to wrap your head around!

What helped me is thinking of it like email: I can use a Gmail account, you can use a Hotmail account, and someone else can use their own private mail server. We all go to different websites/programs/apps to access our emails, and those programs might have different features, layouts, etc, but we can all still email each other. They're all federated with each other. And if you start getting emails from marketing@spamcentral.com, promotions@spamcentral.com, etc, you can block the entire spamcentral.com email domain - ie, defederate from it.

The fediverse works very similarly. We can all use different websites with different layouts and a few different features, but all of them can communicate with each other and show common content because they're federated with each other.

There's a big benefit to this: no single company can control the fediverse. If your instance - feddit.uk - has to shut down, or it turns out to be run by nazis, or they start trying to charge users vast amounts of money to use the instance, or make some other move you don't like, you can just make an account on another instance and continue to use the rest of the fediverse. Maybe a few communities that were hosted on your previous instance will become inaccessible, but the larger fediverse will still be available.