Its a clutch pack inside your transfer box...
Actuated by a solenoid #10...
Need to check if you're getting power to this solenoid when you hit the switch. Is it clicking? If it's not, check the electrical system. Should be getting close to battery voltage. It should share a fuse with the brake lights.
Clutch engagement pressure is 205 +/- 15 psi. Need to hook up a pressure gauge to the plug circled (may even have a pressure port installed there if you're lucky). If you're not getting the pressure here, its either clutch seals or the hydraulic section of the solenoid valve.
If you're getting pressure here and no drive up front, first guess is your clutch is worn out.