A top level site is the first site in a site collection. All other sites within a site collection are children of the top-level site. The URL of the top-level site is also the URL of the site collection.
Most of the time we can use Top Level Site and Site Collection interchangeably - in fact Microsoft do this all the time.
Each Top Level Site has zero to many sub-sites (simply called sites)
This is the lowest level that many things can be scoped to, for example only the Top Level site contains a web part Gallery so you can’t say Collection X, Site A can have a web part but Collection X, Site B can’t.
When you look at Site Settings in a top level site you will see the highlighted sections – in a sub site you will not. Both are called Sites in the UI