For most social media, people can only talk to each other if they both have accounts on the same site. With lemmy, mastodon, pixelfed, etc., it’s designed so people can talk to each other even if they have accounts on different sites, or those sites are running different software. “The fediverse” refers to that interconnected network of millions of people on thousands of sites.

Broadly speaking, app/services/whatever that speak federated protocols. In practice, it’s mostly anything that speaks ActivityPub as the de facto federated protocol.