consider a nand gate for this discussion.
you are giving entity and architecture of nand gate.
by entity you are giving about its input and output.
by architecture you are giving its function (what is inside).
but what you are giving is about a nand gate.
if your circuit has many nand gates , you know that you have given the behaviour of nand gate with entity-architecure pair.
but that is about a nandgate , in general.
if the circuit has gate N! , N2 ... as many gates , then you are giving them as 'component' saying that this is N1 , whose behaviour is already given as entity-architecture pair.
this is called as 'insantiation ' , ie, you are making an instance general nand gate as N1.
think of your schematic libray containg general nand symbols.
from library , if you place the symbol on a sheet , it is a nand but you taking an instance of the symbol and give it a name as N1.
so , entity-arch pair is eqt to lbrary .
'component' is one instance of the library.
i hope you are clear.