A component definition and a component instance are created when a component is created using the Create Component dialog box. Components definitions provide a blueprint for how all components of a specific type, called instances, appear and behave within the drawing area (whether they can be glued to faces, where insertion points appear, and so on). Component definitions are represented by thumbnail images in the Components browser.
Component instances are components definitions that have been inserted in the drawing area (called instancing). Component instances all look like and have the same default behavior as the component definition, but, once brought into the drawing area, can be rotated, scaled, and painted independently of other instances.