It's a network of social media sites aka servers that are independently run, and have no algorithm so posts are in chronological order usually. There's several types of sites, each replacing one conventional alternative like mastodon for x/Twitter and Lemmy for reddit.

It works because the sites belonging to one type can all see the content of other sites of the same type. To the user, each individual site is as convenient as a conventional social media site such as x/twitter. It aims to combine the advantages of decentralization such as independence, with the advantages of centralization such as a large amount of content

One roadblock is marketing, because the first thing the fediverse sites like mastodon or Lemmy try to do when you search for them on Google is get you into a server. That sounds too technical and is not how the average person uses social media at all. Bluesky fixes this and has an entirely new idea for how the fediverse works.

One downside to the concept of servers is that besides feeling fragmented to the average user compared to bluesky or Instagram, most tend to cater to a specific audience so they filter content for you. It's not like bluesky or Instagram where the user does it entirely from scratch by following accounts (which Instagram ignores anyways)