There it is: universals and particulars.
Realism says that both universals and particulars exist. That is, we recognize that different dogs/houses/trees are those things because, although they have different particulars, there is a universal essence of dogs/houses/trees that exists. Plato and Aristotle were Realists.
Nominalism says that the world is made only of particulars. Things we see are put into categories by our thought processes and our language, not by the existence of some abstract universal. William of Ockham and Jean Buridan were Nominalists.
In the two diagrams shown, we see that in Realism, although John and David have different Particulars, they are defined by their Universal quality as human beings. Nominalism, however, shows John and David only defined by their Particulars. The category of Humanity is created by us. There is no abstract "Humanity" essence that exists independent of John and David.
British philosopher Thomas Hobbes (1588-1679) took this a step further: if all the removed pieces were assembled into a complete ship, then which is Theseus' ship? Are they both Theseus' ship? He concludes that this would be absurd.
Even the early scholars understood that there were problems with these concepts, and struggled to reconcile the issues. Still, they did their best to understand how reality worked, and how that would help them to understand everything else.
...such as whether we have individual souls. That discussion will take us back to Averroes tomorrow.