Is it possible to run two instances of android on your phone at the same time? Sorry if I am misusing 'instances'. What I mean is the following: I want to run an master OS. The 'only' thing that master OS does is let me boot/kill/switch between  OS 1, OS 2, OS 3, etc. I want apps to believe they run on a normal Android phone. So if I run  app X on two OS, namely 1 and 2. I want each instance of app X to believe it runs on a different machine. I understand you can do this with a dual boot. However I want both OS at the same time. I interact within OS 1 and switch to OS 2 to continue where I left.
Sounds like you want an Android virtual machine host, like VMWare on desktops/servers.

As far as I know, there are no Android OS virtual machine hosts that can host Android OS virtualized instances. (There are desktop/server hosts that can host Android OS guests though--think AVD, GenyMotion, etc.) I'm guessing an Android host isn't a common case, to want to virtualize multiple instance on a single embedded device. And because of the complexity in doing that, it would have to be pretty low level, maybe even tied to specific devices. So it is unlikely someone will create one any time soon. Sorry.