Fediverse is a neologism made up of two words, "federation" and "universe", and refers to the ecosystem of free/libre and open-source software (FLOSS), the people who contribute to it, as well as the people who use it. Fediverse encompasses two environments: web services and the interoperability protocols (like ActivityPub) that enable these services and users to communicate with each other.
Web services include microblogging (Mastodon, Pleroma, Misskey), news aggregators (Lemmy), photo sharing (Pixelfed), video sharing and streaming (PeerTube), content management systems (WordPress plugins), source code forges (Fogejo, Gitea), podcast platforms (Castopod) and more.
Web services are provided and managed by a variety of entities, including individuals, non-profit organisations, companies, professional media, state and regional public administrations, and major tech companies. Each server that provides a service, for example Mastodon at https://mastodon.social, is called an instance. There are hundreds of instances and each is independent, with its own domain name, set of policies and moderation rules. Administrators can choose to federate with or block other instances, making these decisions with or without input from their user community.
Federation enables users to interact across different services; for instance someone with a Mastodon account can comment on a Pixelfed photo or a PeerTube video.