Instances, sometimes known as dungeons, are environments to which players can travel in order to encounter various enemies, bosses often included. Instances usually have much better rewards than the normal overworld map
in an MMORPG.
They are called instances because though the environment and structure is the same for all parties who enter, you will never encounter another party while yours is playing through the area, thus it is a specific instance
of this area or mission.
Some online games, such as Phantasy Star Online
and Guild Wars
, simply use lobbies and instances in place of a traditional MMO structure. In these games, players form a party in a lobby and then set out to complete objectives and collect items exclusively in said instances, with no open-world exploration outside of these areas.