Each Lemmy intance is hosted by a different person or entity. Lemmy World is hosted by User A, while Beehaw is hosted by User B.

The way federation works, however, is that it allows for User A to connect their server/Lemmy instance to User B’s server/Lemmy instance. This allows for users on Server A to talk to people who are using Lemmy over on Server B.

However, letting your servers interact with other servers is not required. If users of one server are causing problems with your Lemmy instance, you can remove your server from theirs, which removes their access. This is referred to as defederation.

So when Beehaw is defederating other servers, it means they are blocking other servers from interacting with Beehaw.