Object declaration is when you declare that you are going to use a variable of a certain type in your program:
Instentiation is when you actually create the object:
When you declare x, you are just saying that you are going to use a variable x of type int. When you instentiate, you are actually create the object, and assigning values. Even though I used a primitive type, it applies to all objects.
I think there is a LOT of disagreement about what is the 'preferred way' to do it. Many people prefer all variables declared at the top of the block of code that they are used in, and instantiated when about to be used. Others prefer as you say. Just wanted to point that out.
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Building a Better World in your Backyard by Paul Wheaton and Shawn Klassen-Koop