What's the difference between a type, element and an asset?

What are they and how would you recommend each be used? This screenshot in particular speaks to what confuses me:

Hi Katie, the type is referencing the element category. So everything you add to your form is an element, and a button group is a type of element. An asset is a reusable set of styles and properties that you’ve defined for a specific element type: Assets - Feathery Docs