Most online software actually has two separate pieces of software.
One (front end) runs locally on your device, i.e. an app or a webpage on a browser after it has loaded. This is responsible for interfacing directly with the user, converting human input into ones and zeros and vice versa.
The other (back end) runs on the webserver/host/company that your device (and many others) is talking to. It is responsible for storing and giving data/content, managing user accounting information, policing the interactions between users and security.
It is typical to have a single backend which coordinates data sharing among and between users, and to have multiple front ends, each of which takes a different approach to interacting with the user.
For example, lemmy instances are primarily responsible for running a single backend and also send you a copy of the default front end when you open the site in a browser. But you could use another front in software instead. And have it talk to the backend without first downloading a copy of the front end software.
Lemmy Is also a bit special in that it shares data between instances (other, similar backend software) and even entirely different server software (via a common data protocol called activitypub