Really basic summary
Federated means that instances are connected, i.e. lemmy.world accounts and posts can interact with sh.itjust.works ones.
Defederated means that one of the instances is blocked by the other, so all communication between the two is blacklisted.

It's the number of instances that have blocked them.
Accounts can't defederate afaik. There's a way to block instances on some apps, but it's client-side and really just hides posts from that instance.