Creating a federated model in Navisworks involves importing discipline-specific models, such as architectural, structural, and MEP models, into the software and combining them into a single federated file. Model coordination in Navisworks entails aligning and organizing these models spatially to ensure accurate representation of the project. Interference analysis in Navisworks then identifies clashes or conflicts between the combined models, highlighting areas where elements intersect or overlap, facilitating clash resolution and coordination efforts.