From the Revit help file, a type is “a subdivision within a family of elements,” as opposed to an instance which is “an individual occurrence of an element.”
So, in your model you might have a window TYPE called “A”. When you place a window, you have created an INSTANCE of it. Each element is controlled by its type and instance parameters. Instance parameters will only impact that one specific individual element that you are looking at. Type parameters will impact all instances of that specific type.
When you are chaning the type parameters, be careful and be sure that you want to make that change to all the instances of that type. It can have major ramifications. Revit even tries to warn you before you do!
If you do need to make a type parameter change, but don’t want to change your current instances, duplicate that type first to make an entirely new one.