If there are multiple users on a server in the same
channel, the message text is sent only once to that server and then
sent to each client on the channel. This action is then repeated for
each client-server combination until the original message has fanned
out and reached each member of the channel.
Same with PRIVMSG's, they only travel through the servers on the route from the orgin to the destination. It would be truely bandwidth waste to send all messages to all servers.