Is entity an instance of class?
Short -- yes.
Entity is more a concept from real world. Instance (alias is object) -- from programming world.
In programming world we also has an "entity" concept, but here it's more a child of an instance. So any entity is a child of instance. Also entity has it's links to other things but programming -- for example, as people said -- entity can have table in DB. Instance can't have table in DB. As instance is always connected to class.