[Vuejs]-I'm confused about Vue createapp() function. It says "it creates a new application instance". What is an application instance?

Application Instance, is your Vue app.

You are not limited to a single application instance on the same page.
The createApp API allows multiple Vue applications to co-exist on the
same page, each with its own scope for configuration and global
assets:

const app1 = createApp({
  /* ... */
})
app1.mount('#container-1')

const app2 = createApp({
  /* ... */
})
app2.mount('#container-2')

Check Multiple application instances