Yes. If you run the server, then you are the source of truth of that community. All other servers that federate your community query your server to access the community and show it to their users.

So if you run a server and a community explodes there, you might only have 500 users on your instance, but you might have 50k users reading that community and interacting with it from other Lemmy instances, thus your server needs to scale to 50k users worth.

And ever more essential, your server is the source of truth of that community. So if your server is hacked or corrupted or deleted, that community is gone. Other instances don’t mirror it (except for temporary caching), so the Lemmy network essentially is a trust network of other people maintaining servers long term (and each inventing a monetary system to pay for it). I still think the network might be better than a centralized system like reddit, but it definitely has a lot of growing and policies that need to be sorted out very soon