My usual example to explain the concept of federation to people is email - you create an email account with your preferred provider and they all talk to each ot

My usual example to explain the concept of federation to people is email - you create an email account with your preferred provider and they all talk to each other. It's a good analogy on a couple of levels, because of course Gmail has become a dominant player in that space, in some occasionally problematic ways (e.g. it's very difficult to run your own email server now, because GMail might decide you're not trustworthy and stop delivering your mail). There are still several big players though and the system works.