What does "Single installation" license mean?

What does "Single installation" license mean?

It means that your license is valid for only one installation of OpenCart on one server. If you have more than one live stores which have different products and/or are located on different servers, you need a license for each store.

This limitation only applies to live stores. It does not apply to local installations, staging servers or any other kind of test stores. You can have as many as you need of those. 

How many licenses do I need for an OpenCart multi-store?

An OpenCart multi-store means that  you have one OpenCart installation that controls more than one stores, i.e. from the OpenCart Admin you manage several stores. More about multi-store configuration here:
http://doc.opencart.com/display/opencart/Creating+a+multi-store

Since a multi-store is only one OpenCart installation, it requires only one license. 

Related questions: 

If I want to use OMF for several domains, how much do I have to pay?