They’re what is called federated. They use the same protocols which allow each to see the other. The best comparison I’ve heard to describe it is like how you can read emails irrespective if someone used Google Mail, Yahoo Mail, or Microsoft Outlook, or whatever email sending software.
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I’m new to Lemmy and on my first day trying to get to grips with it, I couldn’t post a comment because the Community wouldn’t allow the language (I was posting in English and all the other comments on the post were in English, and my language settings are set to Undefined and English). The whole language selection is actually a blocker to engagement at times.
Just wait for Musky to try and start suing people for using anything with “X” in the title/name.