ocelotpotpie's sibling reply to this has good explanations for the terminology. If you're curious to actually see the software:

* https://www.spigotmc.org/wiki/bungeecord/ - Older, less-performant but still used by some teams

* https://papermc.io/software/velocity - Newer, more performant, maintained by the team that makes Paper, one of the leading performance MC server implementations.

For context of scale btw, when Hypixel had 200k+ players online at peak we had something like 2,000+ 1U E3-1271v3's each with 32GB RAM, all colo'd in a single DC in Chicago. Egress is 70-80gbps or so 95th percentile, with most months (at high peak) egressing 10PB/mo+ of real-time, uncacheable data.