I don’t totally understand the fediverse yet. So an instance is basically just a portion of a website on a certain server, right? And all the instances communicate with each other to create one website?

Great, thank you for letting me know!

Eh, reddit really isn’t much better in this department. It’s not uncommon for multiple subs to exist for the same userbase (r/memes vs r/dankmemes, r/christian vs r/truechristian). Over time users figure out which is which, which is the main one, and which is for them