See, I was thinking decentralizing control was the primary goal of federation. Reddit having total control over the content is killer for any other website, so it makes sense for others to want to abolish that grip.

My thinking was like this: a community is made that every instance can join and post to, the posts would be shared across instances like a mailing list, and the community would be moderated on each instance by that instance's community (there would be a mod for !startrek@startrek.website and a different mod for !startrek@kbin.social), then each community on their own instances would moderate the content themselves, but it would just be a stream of content flowing into them for each instance to deal with itself. This would allow instances to moderate each community themselves according to their rules, as opposed to each community having rules that stretch across the Fediverse. This way a user would be able to post something to !politics@kbin.social, and a moderation team for the !politics@teenagers.wtf would be able to moderate the content coming from the greater "politics" topic according to their instance's rules and their own community's rules; I imagine users on kbin.social and users on teenagers.wtf to have very different ideas of what's acceptable within their communities. This kind of setup would allow a decentralization of users, content and control.

Obviously I was very wrong as to my assumptions of the Fediverse, and I appreciate the education on the subject matter.