ELI5

Let's say each planet is its own "codebase". Lemmy is a planet, Mastodon is a planet, Pixelfed is a planet, Kbin is a planet.

shitjustworks, lemmy.world, lemmy.ml (maintained by the creators of Lemmy), beehaw.org - these are all like separate countries on the Lemmy planet, each with its own unique citizens. They use the same Lemmy codebase, but are separate instances controlled by separate people. Anyone, even you, is allowed to use the Lemmy codebase and make and control their own instance. That's why beehaw can break off and have tighter rules. It's the fediverse working as intended

kbin.social, karab.in, fedia.io - these are all instances of the Kbin codebase. Kbin's a bit different because it can interact with link aggregators (like Lemmy) and microbloggers AKA Twitter posting (like Mastodon). Conversely, Lemmy can only interact with link aggregators. This is because Kbin and Lemmy are 2 completely separate codebases developed and maintained by different people

And in this example, the fediverse itself would be like an inter-galactic network that connects all of the planets and its countries to one another