Application is a Function meeting an argument — the act of applying a Function to a Term.
Term differentiates into three forms: Variable, Function, and Application. Application is where computation happens: a Function is given an argument, the bound Variable is replaced by the argument through substitution, and the result is a new Term that can be further evaluated.
Application simplifies through Reduction — the process of evaluating the substitution and producing a simpler Term. Repeated Application and Reduction continue until the result is a Value (an irreducible Term).
Self-Application — a Function applied to itself — produces Fixed Point: a Term whose evaluation yields itself. This capacity for self-application is what Reflexive Sequence becomes once formalized into syntax.