These classifications refer to how government entities interact with one another. Horizontal G2G interactions take place between different government agencies or departments at the same level of government. For instance, this could involve communication and data sharing between the Ministry of Finance and the Ministry of Health.
Vertical G2G interactions, on the other hand, occur between different levels of government. This could be between the federal or national government and a state or provincial government, or between a state and a local government. An example would be a federal government's system for distributing funds and policies to state governments, which then pass on the information to local authorities.