Multiple instances in Oracle
The documentation explains it very well:


  An Oracle database server consists of an Oracle database and an Oracle
  instance. Every time a database is started, a system global area (SGA)
  is allocated and Oracle background processes are started. The
  combination of the background processes and memory buffers is called
  an Oracle instance.


An oracle database is the physical files that make up the database itself (control files, data files etc) - Documentation link.

A database is associated with one or more instances, with multiple instances making a RAC setup - Documentation link. As far as your second question is concerned, multiple instances of a single database is a RAC setup.