From the Official Documentation:
“A database instance is a set of memory structures that manage database files. A database is a set of physical files on disk created by the CREATE DATABASE statement. The instance manages its associated data and serves the users of the database.
Every running Oracle database is associated with at least one Oracle database instance. Because an instance exists in memory and a database exists on disk, an instance can exist without a database and a database can exist without an instance.”
Feel free to ask specific questions if this is not clear enough.