Instance is probably more overloaded, but also abstract in this case. Container refers to the virtualization mechanism that is lighter than an entire operating system but still isolates several processes into their own environment.
That's fair enough, I guess it's just the fact that the term until very recently confused me rather than clarified things; I found it genuinely obfuscatory, as a developer with relatively light infrastructure experience.
Of course I have come to terms with the fact that by now it's entrenched so we're using it, end of story - give me a few more years and I'll be pretty much adapted to it :-)
Instance of VM image => Running VM
Instance of Container image => Running Container