@Manu The federated timeline is everyone on the local instance + the people they follow. So it's not everyone, but it's a lot of people. The local is just on the instance you're on.

You can follow anyone on any instance and if they're already not being followed by someone on your instance that brings them into your federation and you grow the network. You can find people on other instance by searching @<username>@<instanceURL> instead of just @<username>