If Lemmy and Mastodon continues to get popular, we will eventually get Instance wars.
If the descentralization of social networks continue, we will have to prepare for the eventual rise of the instances wars, where people will start to fight about which instance is better and which one is weird to be in and so on, but that's for the future of us all.
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Forgive my ignorance but if you federate an instance, does that instance have to federate you back? In order for you to comment/upvote/see posts etc?
Nope, assuming the default settings - that is, they've not explicitly decided to allowlist selected servers or block yours - there's nothing that instance has to do if you subscribe to a community on it.
They'll push content to you and it just magically works.
TLDR: federation is basically a push from the origin server (the one the community belongs to) to any server that subscribes to that community.
If I made my own instance with only me as a member and I only subscribe to showerthoughts.lemmy.fmhy.lm then that's the only community/push update my instance would get?
Yep, you'll only get content that someone on your instance has subscribed to, so if that's the only subscription that's the only content that'll show up.
Where can I read about this architecture?
I'm not the right person to ask.