In Drupal, entities are a representation of data that have a specific structure. There are specific entity types, which have different bundles and fields attached to those bundles. Bundles are implementations of entities that can have fields attached to themselves. In terms of programming, you can consider an entity that supports bundles an abstract class and each bundle a class that extends that abstract class. Fields are added to bundles. This is part of the reasoning for the term, as an entity type can contain a bundle of fields.
An entity is an instance of an entity type defined in Drupal. Drupal 8 provides two entity types: configuration and content. Configuration entities are not fieldable and represent a configuration within a site. Content entities are fieldable and can have bundles. Bundles are controlled through configuration entities.