In brief, federation means sharing information between Wikibase instances (very much including Wikidata) in order to broaden the base of available data.
Expanding federation and interconnection between Wikibases is part of Wikimedia Deutschland's 2021 Linked Open Data strategy.
Federation takes many forms; misconceptions or presumptions about the term can lead to confusion. There's a detailed article on federated knowledge graphs that can serve as a good primer on the high-level concepts around federation.
Below we lay out some concrete types of federation and explain what’s currently available.
The federated query is a property of SPARQL that allows your search to include multiple endpoints.
Federated SPARQL querying works across Wikibase instances. You can see a partial, example list of federation endpoints used by Wikidata here.
See our introduction to federated querying to get started.
The Wikibase registry also has some useful information, including some ideas for conventions that facilitate federated querying, such as the "same-as" property. (See the Wikibase FAQ for more on the "same-as" property.)
Finally, there’s an interesting blog post that demonstrates some federated querying in the context of the Wikibase registry.
Federation and Wikidata
Instead of creating a set of properties from scratch on a new instance of Wikibase, you can configure a new Wikibase instance to obtain a robust, living and constantly updated property set from Wikidata.
We call this feature Federated Properties. Read more about this feature in its component document and its Phabricator project. (There are some caveats; this feature has limitations and is currently for testing only.)
What it’s not
Federating with Wikidata’s properties doesn’t amount to mirroring Wikidata. Though some want to do just that in order to overcome rate limits, and dumps are produced regularly, such an endeavor is by no means an easy task and likely won’t accomplish what you’re aiming for.
Two-way federation of data between Wikibase instances is not yet implemented and probably a long way off. The aforementioned Federated Properties project is the first step of a longer journey in this direction.