A shared Identity and/or authentication, as the result of federation by either the Entity or by two or more organisations. In a federated identity management scenario, an organisation may assume the role of an identity provider, or requestor / service provider, or both - they are not mutually exclusive. An identity provider "owns" the relationship, directly manages end users and is the authoritative source for issuing and validating identities and credentials for a set of users. Identity providers "vouch" for the user identity in a federated interaction with service providers. A service provider does not have a vested business interest in managing the user, but acts as a "relying party" to validate credentials issued by a trusted identity partner. Key standards are SAML, Liberty, WS-Federation, WS-Security and WS-Trust. Also see Federation. A "Circle of Trust" is used to describes the legal agreements made between the parties.

Source: http://identityaccessman.blogspot.com/2006/08/identity-dictionary.html