Instance is the best name for it as instance implies replication and federation. Server isn’t incorrect but also a server doesn’t necessarily mirror content which is why I think instance is the most correct term for fediverse services. I don’t think change the vernacular for instances is going to make it easier to understand for people who aren’t technical though. I think just referring it to mastodon/lemmy/whatever is fine and then I would tell them to sign up for lemmy at lemmy.world or sh.it.just.works etc like you would tell someone to sign up for email at google or yahoo