You explain it to normies by saying it’s a link aggregator and discussion site and microblogger, like R/T. What they are really asking for, however, isn’t a rundown of federation mechanisms but a rationale for the fed itself. ‘How does it work?’ really means ‘What are the crucial differences and why do they matter?’ So a good answer to that must talk about ownership, the profit motive, user friendliness, the perils of consolidation, etc.