Green’s Dictionary of Slang

(Aus.) to join in sexual union.

1886		W. Ausralian (Perth) 27 Feb. 5/6: Australians will probably now talk of ‘federating’ where formerly they talked of being ‘turned off,’ or ‘hitched,’ or ‘spliced’.
1890		Bulletin (Sydney) 12 Apr. 11/2: [cartoon text] Sue (artfully): ‘What’s the meaning of federation, Charlie?’ He (bashfully): ‘Why, Nellie (ahem), if you’ll become my wife we shall be federated.’ – (Nellie is pleased with the explanation.) .
1899		Mercury (Hobart) 26 July 2/1: One prominent citizen, rumor hath it, has been caught federating with another citizen’s spouse.