In short, every Lemmy instance holds a complete copy of the full post and comment history of every user of every other website on the lemmy/mastodon network. Every post and comment you make is first copied locally and then sent to the other sites for their own local copy.

It’s more resource intensive to have all of these separate sites, but it ensures that if one falls, another can take its place basically instantly. Redundancy means lemmy is incredibly sturdy with effectively 99.99% uptime. Your site might go down, but just change the url and you’re back. Albeit with a new account to make. Though I haven’t had to swap sites at this point, and it’s not a common occurrence