Area serves as generic term to describe any separately loaded zone in the game. Areas have various attributes and rule sets attributed them depending on the type of the area. Using the rules of the specific area the game creates a randomized time-limited instance of an area which can be played by the character.
Areas are considered each separately loaded zone in the game with a specific set of attributes and rules. Those attributes can be thought of as a plan on how to create a specific zone.
An area may have multiple layout versions defined that are used to create the randomized instances. The layouts dictate specific features of an instance, so that for the example the waypoint, exits and specific features such as quest objectives are always located in roughly the same positions. As an example, on the Ledge area in Act 1 there will always be a 3 stones next to the waypoint showing which of the 2 directions to take to get to the exit towards the Climb.
The individual pieces used create the actual graphical looks are often refereed to as tileset collectively. These individual pieces (such as walls, doorways, rivers etc) are designed by hand and are non-randomized themselves, however they are put together semi-randomly to form a coherent zone according to the layout. This allows a high level of variation in each instance while using the same building blocks ("tiles").
Once the tiles have been generated, the instance will be filled with objects according to the area rules. Specific flags on the area will change the behavior drastically - a town will never contain any monsters, a map will grant additional life and damage scaling to the monsters depending on the map tier, etc. Similar to items maps use a hidden tag system that sets certain attribute that govern which modifiers, monsters and other objects can be placed inside the instance and their likelihood. In addition, each area has a default level associated with it which is used both to determine what monsters, strongboxes, modifiers and other objects are allowed, but also sets the level of any object within the area. So for example, a level 60 area will also contain level 60 strongboxes and monsters (note that this includes rare and unique monsters. These drop higher level items, but are not a higher level themselves; a 60 map will still have a 60 unique monster, it just happens to drop level 62 items). The level may be overridden, for example by delving deeper, shaping a map or using a watchstone.
Map rules also include settings such as the spawn chance for league-related objects or masters. Generally this is streamlined to a specific number for most areas, but may be fine-tuned in specific areas to balance around the size of the area. Small areas may have a lower chance as a result. Some areas may also have it disabled entirely (such as towns or hideouts).
Areas can be connected to each other allowing characters to pass from one area to another. Most of the story areas throughout the acts are connected in some fashion to each other which can be seen on the world screen. Areas also have a parent area which is used to determine where the character respawns after death. Usually this is the most recent town area.
As mentioned above, an instance is a specific, randomly generated zone using the rules defined by the area. They hold the current state of the zone, so whenever an item is dropped or a monster is killed that will be saved within the instance.
The game automatically creates an instance when a player tries to join an area with the region based on the player's realm choice. If there is an existing instance already created by the player or any party members that that will be joined instead.
Instances with no players in them continue to exist for a limited time (about 8-15 minutes in instances created in acts, but much longer for instances created from the map device). The instance is destroyed after the time elapses, along with the items and monsters inside the instance.
When entering an area, holding CTRL displays existing instances of the area, and allows the player to create a new instance. The latter can be used to "reset" an area and start it again with a new layout, set of monsters, etc.
Most instances can hold up to six players at once, with the exception of towns which can hold many more.
Overview of areas