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It usually refers to content available to both the Federation and Klingon factions, together with those allied to those factions (Fed or KDF aligned Romulans, and TOS Federation characters). The majority of content from Cardassian Struggle onwards is cross-faction, as are PvE Queues and adventure zones. Faction specific content tends to be limited to early missions and main faction hubs.
Standard starships (i.e. Federation and Klingon design starships) are limited to allied factions (Federation ships being usable by TOS Federation and Fed-allied Romulans) but not with their opposite major faction while Romulan warbirds are limited to Romulans only. Starships not specific to a faction (i.e. alien ships like those of the Vaadwaur or Ferengi) are usable across all factions.