An extension is pattern that matches the first field in extensions.conf. It might not have a device at all. It might have many devices. It is best practice, although rarely observed, that it should not have the same name as any associated device.
(Note that FreePBX uses the term differently.)
In your case, you haven't told us enough to even know whether a device is specific enough, e.g. a single device name may be used for all calls from the PSTN, but different caller IDs may require different treatment. These will have individual entries in sip.conf, but need not have extensions in extensions.conf (if they can't receive calls), or may share an extension (if several phones ring at once).
I think others are generally assuming that you are talking about SIP devices on your own LAN which behave like single line telephone instruments.