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I used to have full allied status with the Federation, but then I didn't play Elite: Dangerous for a few weeks due to business travel. When I started playing the game again, my reputation with the Federation superpower was only mid-friendly.

Does your reputation with minor factions and superpowers deteriorate over time, if you don't play the game at all, or continually work on the status?

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Yes it does, with the Major Factions.

According to the Wiki

Reputation decay only applies to the Major factions, Alliance, Federation & Empire.

When your status with a major faction is above 75% Friendly, it will slowly decay down to 75%, by a percentage point every couple of days. Reputation decay happens whether you're logged into the game or not. To stay Allied you have to keep doing good deeds that gain you reputation for the major faction.

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