There's a decent definition of federation here, in the discuss of Gmail and AIM. Basically: people using service provider X can interact with people on service provider Y.

• email
• XMPP, eventually - although that didn't save it

If that definition is right, it only really applies to interactions that peer-to-peer, mediated by servers. But identity/ single sign-on is called federated as well, and is really just a peer-server-server interaction, so ...