An Application.xml file defines the configuration that you set up in Wowza Streaming Engine Manager for a given application. An application instance is an instantiation of an application and provides a namespace and context for streaming. An application instance is started dynamically and a single application can have multiple named application instances running simultaneously. If no name is specified for an application instance, then the default name (_definst_) is used. In many streaming scenarios, a single application instance is used per- application and the name is never referenced and defaults to _definst_. It's more common to use multiple application instances in video chat and video conferencing scenarios where you must create multiple rooms for streaming. In this case, application instances are used to separate streaming into rooms. Each room is a separate application instance, which provides separation and a namespace for each room.
You define the application instance when publishing a live stream: