From what I got Kbin is an instance of Lemmy and Lemmy part of the Fediverse. The Fediverce is made up of a bunch of different types of social platforms.
eg:
Microblogging: Mastodon, Pleroma, Misskey
Blogging: Write.as, Read.as
Video hosting: Peertube
Audio hosting: Funkwhale
Image hosting: Pixelfed
Link aggregator: Lemmy
Instances are those platforms being hosted by a user. It's like their own personal reddit. They get to make their own rules and stuff. The cool thing is all the instances can talk to each other. And you can choose to communicate the other instances.
There's more to it but I don't really understand everything.