Its ppl copying the content on each others servers and all hosting frontends/backends that serve the same content. The site is where your content is hosted, like if you upload a pic its to that instance and based on their upload rules for size. I think lemm.ee has like a 50mb limit while some have much higher limits. All of your posts/comments originate from your site and then get coppied to any site that hasnt blocked it and has communicated with it before. (Me subscribing to a lemmy.world community from my instance would count as communicating so they would federate and posts from that community and other communiteis on that instance would show up on mine in the future)

Like if you hosted a site that was an exact clone of mine that copied or linked content over everytime it was posted to match the other.