I think the general idea behind Lemmy and activity pub was not to have all the instances and groups on one server to begin with. It's just that some of the older users of Lemmy/kbin/mastodon, already had the servers up and running instead of people creating own self-hosted instances.

The intention was more for one server to host one instance on a specific topic and then federate with the rest of the community. That server would just be in control of that one instance, like a subreddit on Reddit's main site.

Instead what you had was three or four people who were used to the back end software, creating a bunch of groups or letting be created a bunch of groups on their instance. This is going to centralize the population to certain servers instead of ending up with thousands of small federated servers.

And once the personal belief systems and moderation start seeping into all groups on that server we're going to see problems. The more control one single person has, the higher the likelihood is that they're going to start abusing the power in some way, even if they don't think it's an abuse their selves.