Lemmy claims decentralization, but once you join a community on one instance you’re still subject to that instance’s rules and moderators. Being banned from c/community@instance still means you can’t post there unless you make a new account elsewhere. That isn’t real decentralization, it’s just fragmentation where every instance ends up replicating the same centralized moderation power in a different place. Federated instances don’t stop this, they just scatter the same problem across multiple servers. If the goal is escaping centralized control, the reality is you still get banned, silenced, or cut off the same way, the only “freedom” is signing up somewhere else. That’s not decentralization in practice, it’s decentralization in name only.
I don’t think Lemmy ever claimed they’re decentralised, because it has a specific meaning that sets itself apart from being federated, and Lemmy certainly isn’t decentralised.
The whole freedom of federation comes from the fact that if you don’t like something, you’re free to set up your own stuff and do it there. In practice, it doesn’t work that well as advertised especially for something like Lemmy, which creates an additional layer of isolation (communities) within itself, but it requires a large group of people in a single community to work. I think Lemmy needs a way to '“merge” communities across instance.
decentralization doesn’t have a particularly specific meaning. Federation absolutely qualifies for having a certain degree of it. You can be more or less decentralized ranging from completely monolithic to fully p2p. Then there are related properties like the ability to migrate or anonymity.