Simply put, a Microsoft SQL Server database is a collection of objects that hold and
manipulate data. A typical SQL Server instance has only a handful of databases, but it’s not
unusual for a single instance to contain several dozen databases. The technical limit for one
SQL Server instance is 32,767 databases. But practically speaking, this limit would never
be reached.

To elaborate a bit, you can think of a SQL Server database as having the following properties
and features

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