We usually use the word "instance" to talk about a single Jira installation.
Imagine I download Jira. I take the installation files and copy them to three computers and run them. At the end of the installation, I have three separate "instances" of Jira. Three separate urls that they run on and isolated data-sets.
Now imagine that I convert them to a Data Centre installation. Each instance becomes a node in the DC. I now only have one "instance" because there's only one url and one collection of projects, users, etc.