I'm sorta new here myself so I might not get all this right, but decentralized is what it sounds like; Lemmy as a whole is not hosted by one central person/company. Instead, each Lemmy server (instance?) is hosted by a different person or group, so if lemmy.world ever gets shut down you'll still be able to use all the other servers like Lemmy.zip or Lemmy.ml.

The fediverse, short for federated universe, encompasses all software that uses the ActivityPub protocol (I think) so Lemmy is only part of the fediverse. Mastodon is also part of the fediverse, although it is more similar to Twitter rather than Reddit, and since both Lemmy and Mastodon are part of the fediverse they can view and post content to each other. I don't understand the cross communication aspect well so if someone else knows I would be happy to hear.