Acharya Prashant explains the fundamental difference between being a 'person' and being an 'individual'. A person is described as a fragmented mind divided into sectors like family, society, education, and media, where each sector is controlled by external influences. This fragmented mind is compared to a servant with many masters, leading to a dissipated life of random motion where one's energy is never focused. In contrast, an individual is 'indivisible' and lives by their own light and intelligence. While an individual listens to everyone, their actions are guided by their own understanding and discretion rather than external conditioning or borrowed ideas.