A relay is like an instance in AP. It hosts content and relays content from other relays according to its own moderation policies. The difference in nostr is that most users are usually connected to multiple relays, whereas an AP a user is connected to one ‘instance’ and their instance connects to other instances.
Thanks, I think I'll have to read up on the details later though to get a clear idea of what is stored where, where accounts are created and held and so on.