I mean... it's pretty self-descriptive if you've ever taken a high-school governments class. A federation is a group of functionally separate entities that come together to form a system (like U.S. states forming a federal government, or European countries forming an international union).

If one of the members misbehaves, the other federation members may stop talking to them. Think of that like a no-deal Brexit situation. Now Britain's gone from the union and they can't freely communicate workers/goods anymore, like an island. That's defederation in a nutshell.