The term 'fief' comes from Medieval land tenure, where it's land granted to a lord in exchange for feudal service. Pop medievalism holds that feudal lords had pretty unlimited rights (the reality is that it's far more complex), and so the term 'fiefdom' in modern contexts carries a connotation that the ruler of the fiefdom is ruling it tyrannically. Another element of the modern connotation is that a fiefdom is usually small, and the ruler is acting as if it's rather more important than it actually is.

In short, it's a backhanded insult.

Yes, what the other commenters said. By exerting unilateral control, he's destroying the existing democratic governance mechanisms and making it a sort of rule by dictatorship. If you metaphorically treat freenode as territory, you can say that it's become Lee's fief, or fiefdom.

I'm no native speaker nor have I ever heard that word before. Looking online I found this definition:

fiefdom /ˈfiːfdəm/

a territory or sphere of operation controlled by a particular person or group.

"a mafia boss who has turned the town into his private fiefdom"

It’s when a manager or leader thinks they are the king or God of their little organization, and typically run it like a despotic ruler