  We review the progress in modelling the galaxy population in hydrodynamical
simulations of the Lambda-CDM cosmogony. State-of-the-art simulations now
broadly reproduce the observed spatial clustering of galaxies, the
distributions of key characteristics such as mass, size and star formation
rate, and scaling relations connecting diverse properties to mass. Such
improvements engender confidence in the insight drawn from simulations. Many
important outcomes however, particularly the properties of circumgalactic gas,
are sensitive to the details of the subgrid models used to approximate the
macroscopic effects of unresolved physics, such as feedback processes. We
compare the outcomes of leading simulation suites with observations and with
each other, to identify the enduring successes they have cultivated and the
outstanding challenges to be tackled with the next generation of models. Our
key conclusions are: 1) Realistic galaxies can be reproduced by calibrating the
ill-constrained parameters of subgrid feedback models. Feedback is dominated by
stars and by black holes in low mass and high mass galaxies, respectively; 2)
Adjusting or disabling the physical processes implemented in simulations can
elucidate their impact on observables, but outcomes can be degenerate; 3)
Similar galaxy populations can emerge in simulations with dissimilar subgrid
feedback implementations. However, these models generally predict markedly
different gas flow rates into, and out of, galaxies and their haloes. CGM
observations are thus a promising means of breaking this degeneracy and guiding
the development of new feedback models.
