Stance: the positioning of the body for combat.
Steps are transitions between stances; stances are where you end up after steps. Confusing, huh? In Bando, we have two categories of stances, formal and combat. Formal stances are rather strictly defined postures used to learn and categorize weight shifts, directions, and body alignment. They provide the structure to support techniques. Dr. Gyi would say "You cannot fire a cannon off a bamboo platform." In Bando, we have three main formal stances, each with three variants.
Combat stances are less formal and more fluid. Again, there are two main types of combative stances. The first is your personal fighting stance. This is your "ready position" for fighting. I often describe it to students as an "idling car at a red light." The engine is running, the car will go -- just as soon as the light changes. I teach my students certain key elements that must be present in the fighting stance principles of hand position, which hand leads, and so on. The second form of combative stance is the functional application of the formal stances. They're not quite as technically perfect as the formal stances, but they should be recognizably related to them.
Ian Abernathy wrote a very good article about the principles and development of stances in training. I encourage you to read it. Ian Abernathy: My Stance on Stances One of the key ideas in it is to understand the role of stance and stance training, and how it relates to functional fighting.