The instance owner/admins are in charge of that. They're kind of equivalent to the Reddit admins, except if you don't like the instance admins you can go to a different Lemmy instance but you can't move to a new Reddit instance. Also, community names are unique to each instance, so !support@lemmy.world and !support@lemm.ee share the same name but are two separate communities in two separate instances.
This article explains it pretty well. Though it focuses on Mastodon and similar Twitter clones, which all suffer from being clones of a dog shit idea for social media.
Largest shortcoming is that in order to see any content, you (or someone else on your instance) needs to follow someone/thing else from a different instance, and the only way to do that is to pour over hundreds or thousands of other websites. This means that objectively, the best experience for a new user is to join the largest instance available, which kind of defeats the purpose of federation. Also, 99%+ of users couldn't care less about federation and there aren't (m)any other selling points so nobody cares to leave the platforms they're already established on.
Idk why he is sideways. I think he likes it.