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From in +‎ stead, from Middle English ine (in) + stede (stead). Related to German statt.

instead (not comparable)

  1. In the place of something (usually mentioned earlier); as a substitute or alternative.

    I was going to go shopping, but I went dancing instead.

    • 2013 June 28, Joris Luyendijk, “Our banks are out of control”, in The Guardian Weekly, volume 189, number 3, page 21:

      Seeing the British establishment struggle with the financial sector is like watching an alcoholic […].  Until 2008 there was denial over what finance had become. […]  But the scandals kept coming, […]. A broad section of the political class now recognises the need for change but remains unable to see the necessity of a fundamental overhaul. Instead it offers fixes and patches.

in the place of (it)