I've been explaining it as countries/international travel. Lemmy is a country, Mastodon is a country, you can travel freely between them but you need a passport. Each service has it's own government whose rules you have to abide. Lemmy instances are like states (or provinces or what have you), where you can just... freely travel between them. Each instance has it's own local government whose rules you have to abide. Communities are like cities/towns, with their own small local government whose rules you have to abide... etc, etc.