the simplest explanation would be that a network of irc server are working together to provide the same channel for its users to interact with.
so imagine if you had a cluster of lemmy servers, each of them are helping to keep conversation going in an identical community. !example@lemmy.one !example@lemmy.two !example@lemmy.three
if lemmy.one and lemmy.three go down for maintenance or whatever, lemmy.two is still serving the community. once lemmy.one comes online, it syncs up with lemmy.two and both serve the same community until lemmy.three comes back and syncs up too.
in this way, you don't have three separate example communities on different servers, but one community that multiple servers are sharing.
i hope this helps explain my thoughts.
A Federation of lemmy instances need to do for Communities what a network of IRC servers do for channels.