Yeah, that's federation. In terms of the principle in government as well as its application in the lemmy protocol.

lemmy.world and beehaw.org are defederated. However, this doesn't mean that you can't see beehaw posts as a lemmy.world user, or vice versa. But (let's say you're a lemmy.world user) if you comment on a beehaw post, you're commenting on a replicated version of the post that is hosted on lemmy.world. It is not synced with the original post hosted on beehaw, and you will only be able to see comments from other lemmy.world users and comments from before beehaw defederated.