alright thx :)

Basically any individual objects that the game has to keep track of. Active instances is the number that are local and currently active and so the game has to actively process and track. Anything altered from the way the world starts generally increases this number.
If they go high enough in any given area, generally by massive building/land alterations in one location, they will negatively impact performance, but the amount varies by your computers hardware and if you are playing in a server.