Distributed forwarding is when there are line cards that can make decisions without the input of a route processor.
When a packet is received on the ingress line card, it is transmitted to the local forwarding engine. The forwarding engine performs a packet lookup and determines if the outbound interface is local.
If the outbound interface is local it will forward the packet out of a local interface.
If the outbound interface is not local and located on a different line card, the packet is sent across the switch fabric, which is also known as the back plane, directly to the egress line card and bypassing the route processor.