this post was submitted on 09 Jun 2023
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No, that's actually the beauty of it all.
Imagine if now every subreddit would be located on its own server, not somewhere in a Reddit headquarters. So r/funny is now running on server with address my-server123.com and thus have address my-server123.com/r/funny. r/europe is now running on eu.gov and thus have address eu.gov/r/europe. etc. Good, but lets say I want to create a subreddit r/myFavoriteYoutuber but I don't have a server. No problem, I contact people at r/funny and they allow my subreddit to run on their server, so its address will be my-server123.com/r/myFavoriteYoutuber. The "my-server123.com" and "eu.gov" is what we'd call an instance.
I write some extended explanation after lunch :)