It's just a general term for all the different federated services. Lemmy is federated Reddit. Kbin is another reddit-like federated service. Mastodon is federated Twitter. There are also federated versions of things like YouTube and Instagram. They all use a technology called "ActivityPub", which means you can sorta see Lemmy posts from Mastodon and vice versa. It's mostly not useful, but it does mean if you mention a Mastodon account in Lemmy, they'll get a notification and be able to reply without being on Lemmy. Kbin and Lemmy can interact with each other much more seamlessly because of how similar they are.

Collectively, they're all called the "fediverse". You might also occasionally see the term "threadiverse" (or some other spelling of that), to refer to all the federated services specifically designed to be similar to Reddit. Mainly Lemmy and Kbin.

Realistically though, none of this is stuff you should need to know. It's all still under development and a little wonky, but as much as possible the goal should be for it to all be transparent to users. It should just work.