Your account or identity has a unique address called a handle and is hosted on one of the many servers, also called instances.
An instance is basically a small social network hosted on one server. Each instance can have its own set of rules as for what content is allowed. You can also host your own instance. Each instance runs one software.
The software used on an instance is essential for the user experience and possibilities.
Many software projects use the same protocol which enables instances to communicate with each other. Most software projects use Activity Pub. Some projects might not have full federation with other projects yet.
The Fediverse (federated universe) is the sum of all accounts, on all instances using any software, communicating with any protocol. The Fediverse includes more than just social media projects. Any software that federates using one of the protocols is part of the Fediverse.
@PaulaToThePeople@ClimateJustice.social is an example for a handle. ClimateJustice.social is the instance the account is on. The software it uses is Mastodon. Thanks to the ActivityPub protocol it can follow accounts on other instances that use e.g. Mastodon, GNU Social or Pixelfed software.