One server might focus on the southeast, eg. /r/atlanta, /r/georgia, /r/falcons, etc. Another might focus on gaming, hosting subtopics such as /r/nintendo, /r/minecraft, /r/ps4, etc.
If you're on one machine, you can have it pull in discussions from other nodes. Or your client software might do that automatically for you.
Nodes might agree on a common short form namespace to refer to different communities, and we might even be able to bolt this on to existing systems, eg. /r/me_irl is Reddit, whereas /hn/show is "Show Hacker News". It doesn't necessarily have to be backwards-compatible with non-fedarated systems, but it could be.
I imagine single sign on, and good APIs for ingesting another community's or user's content. Ranking metadata can also be supplied by the host community, but local communities or individuals can apply their own transformative equations on top of them.