An instance means “an example or single occurrence of something”. In COPP, it is a single occurrence of a type. You use an instance when you want to use a COPP type in another COPP type. For example, when you add a register to a COPP Component Type, then you are adding an instance of the subcomponent type “register”. To clarify, you are not using the subcomponent type itself.
Another example is when you add a type constant of type float into your Component type. In that case, you are adding an instance of the data type “float”. As a final example, you add an instance of your assembly, when you add an assembly to your project.

When you define a type, you can use it again and again. Further, you can add as many instances as you need. In the case, where there is a new version of a type, you can decide if you want to update the instances of the type or not.