What is an instance? what is a federation? what is a server? can someone please describe in simple terms how this all runs and how we as users navigate it?
Instance == server == each individual lemmy (Beehaw is its own instance, so is lemmy.ca, etc)
Basically, reddit was a bunch of communities on one server (the reddit servers)
Each lemmy instance has its own collection of communities, and each lemmy is connected together, so users from any individual lemmy can read and interact with communities and users from other lemmys (this is federation)
All of these lemmy instances federating makes up the greater lemmy network as a whole
If you want to browse a community from a specific instance on your home instance you have to add the 'home' instance.
For example your home instance (where you did register your account) is Lemmy.ml and the community you want to interact with is on Lemmy.world you would use:
Doesn’t this then make, a bunch of communities with same names like ‘iOS’. Then it feels fractured across a bunch of groups of same enthusiasts. Or what do I misunderstand about this or it’s benefits? I’m legitimately curious.
Yes, it is fractured, and that is by intention. The point is that no one single person can control the entirety of the Lemmyverse. Suppose a spez comes along and tries to ruin things. Then, at worst, he can only destroy 1 instance. Even if he destroys the biggest instance, then it's a big loss, but it's not the end of the entire platform. Lemmyverse lives on.
As for how the fracturing affects the user - not much. As mentioned in other comments, each instance can communicate seamlessly between each other. I can post to other instances, and other instances can post to mine. All information is shared.
One caveat, though, is that the Lemmyverse is still very much in its early growth stages. So you'll find a bunch of communities spread out over a bunch of instances that do virtually the same thing. It'll look like the community is fractured. But over time, users are probably just going to settle on a single community, we just don't know which one yet. Think of it like subreddits on Reddit. There's basically always 3 subreddits about the same topic, but there's always the one major subreddit, which is usually the one that you're looking for. We haven't reached that point yet - we're still waiting to see which is going to be the "major" community for most topics.
The one thing I dislike is the usage of 'lemmy', which you seem to use as a synonym for 'instance'. That is both inconsistent (you already established terms for that; 'instance' and 'server'), and inaccurate.
Lemmy is the whole, the network of federated and defederated instances.