An instance is a specialized type of difficult dungeon created to prevent problems of over-crowding and kill stealing. These dungeons are often more difficult than the regular PvE experience and require working together in a five-person party, some even requiring twenty or more person raids. When entering an instance, a new copy of the dungeon is created which is unique to the particular party or raid which has entered it thus no one else can enter the dungeon and kill a named boss without being explicitly invited to do so. This helps to stop players who would follow a group into a dungeon, wait for the them to clear the way to the boss, than fight the boss thus exploiting others clearing work. This also prevents over-crowding of a boss because any number of instances can be created and each has its own copy of that particular boss. Items from bosses are Bind on pickup. Instances fall into the following categories:
Dungeons are places where 5 to 10 players group together. Most dungeons can be found in places where players are questing. Loot is usually on a need/greed system. A dice window pops up, if the player needs it, he rolls need, if not he greeds it.
Raids are places where 10 to 40 players group together. Most are done within individual guilds. Loot is usually on master looter, where one person loots the items from a boss kill. Then by a predetermined system, either through DKP[1] (Dragon Kill Points), loot council or whatever other system is chosen, the items are distributed.