What is the difference between Joomla components, modules, extensions and plugins?
Modules and components are displayed on a page.
Plugins operate behind the scenes and can do a multitude of things, like replacing content with other content, perform searches, perform login/logout functions, or anything really tricky that you can imagine.
There can only ever be one component on a page. When you choose menu items, you are actually choosing the component that you wish a page to display. The variables for the component are stored once (in the database), so you can't have multiple instances of the component!
On the other hand, modules are added multiple times. You can have many modules on the one page. In fact, you could have 100 instances of the same module on the one page. The variables for a module are stored against each instance. (in the database).
This is why joomla templates have one place holder for a component, and many place holders for modules.
A module can be added to an individual page (menu item) , or seleceted pages, or all pages.
Remember that a menu item is indeed a component choice. Each menu item does store variables in the database, so it is possible to feed the component display details. E.g. what page id the content component is to display.
In the back end, components can have many backend settings and functions, and "do" many more things than a module.
Examples of a component are:
Examples of a module: