Think of an instance as a unique copy of an asset. The original asset determines the default properties of any new instance you create. Changes you make to the properties for an instance don't affect the original asset. For example, you can change a material to have a different appearance without changing the master material. This would be a material instance.
In Verse, an instance is to create a variable, specify its identifier and type, which is called declaring a variable, and assign a value to the variable, which is called initializing.