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Stardate: Unknown The inhabitants of Malcoria III have recently developed warp technology. While the warp project is still in its infancy and largely experimental, the Federation believes it is a sufficient reason for first contact between their two cultures to take place. However, their efforts on contact are hindered by the fact that Riker is lost on the surface, and a xenophobic attitude is prevalent among some Malcorians.
Deanna: Captain Picard is from a planet called Earth, which is over 2000 light years from here.
Another example of the writers failing to grasp the inadequacy of "warp drive" as it is defined: "the cube of the warp factor times the speed of light". The Enterprise has a maximum warp in the 9.5 range, but its maximum cruising (i.e., sustainable) warp is about warp 8, or 512x the speed of light. This means that in one year at this maximum warp, it could cover only 512 light years of distance. So Deanna has just indicated that this planet is almost four years travel at top speed from Earth, a place it was at only at the beginning of this fourth season. Given that it's not likely to have been four years, ship's time, since the Borg assault on Earth, clearly we have a substantial continuity/factual issue.
To express this as (presumably) at the edge of Federation space is also a problem, since that's in one direction. A sociopolitical entity which takes five to six years to "cross" (assuming for the benefit of the doubt that the expansion is asymmetrical) is generally going to have a hard time to function, and a difficult time to support its farthest reaches in the event of emergencies and so on -- so what socio-political benefit is there to be a part of said entity? It would either not expand into such a distance or it would fall apart at the first major challenge.
Clearly, the original canonical explanation of "warp factor" is inadequate to properly deal with events on the Enterprise, in any of its incarnations.