In this context, it means that content from this service is shared with other servers. This is different from decentralized - in a decentralized network, every client communicates directly with other clients, whereas in a federated network, clients communicate with central servers but the servers can interoperate . Email is a good example of a federated network - mail clients communicate with centralized mail servers, but mail servers can send messages to other mail servers. To extend that analogy, when you write an article on Write.as your browser sends that data to the Write.as server, but the server federates that data to various other servers - Mastodon instances, Pleroma instances, etc. This is what enables Mastodon et. al users to like, follow, and share content posted to Write.as.
