Lemmy is an open source software that anyone can run on their own computers. People can’t run their own reddit because its source code is closed. When a person runs lemmy on their server (computer), it has its own domain name (like google.com). Each domain name is a different instance, like lemmy.world or sh.itjust.works. These different instances can talk to each other and exchange posts and comments. This is called federation. This means you can create an account on lemmy.world and post comments and posts on sh.itjust.works. There are over 1000 instances. They can all talk to each other unless they choose not to. When an instance decides to block another instance, it is called defederation. Each instance is its own seperate thing and instances talk to each other in the background. Your account data is only stored on the instance you signed up on.