Since you didn’t quite get an answer, an “instance” is like a “website” kind of. Just like you’d go to Reddit and have access to all of the subreddits on their servers, an instance is a one version of Reddit. There are multiple “Reddits” like lemmy.world, lemm.ee, feddit.de, etc that all have their own “subreddits”. They all interact with each other though so you can see every community on every instance as long as they’re still linked.