The Duplicate and Duplicate Special commands let you create either a complete duplicate or a lightweight instance of the original. For example, you could create armies and forests full of duplicate objects without needing the memory or computing power to handle that much actual geometry.
An instance is like an alias or shortcut or symbolic link in a file system: it’s a visual pointer back to the original. However, each instance has its own transform node so it can have its own position, rotation, and scaling.
An instance stays linked to the original so when the original changes, the instance changes too. If you move a control point on the original, all instances automatically update. Instances do not have their own control points.
(In the Outliner an instance appears to have its own shape node but this is actually shared with the original.)