An album is a kind of website. It is a collection of stories that has an owner, a topic, and an audience. When you own an album, you control which stories appear in it and who can see it.
Create as many albums as you wish, and post any story of yours to any or all of your albums. If an album of yours is public, a story you post to it can be seen by anybody. If an album of yours is private, only people you’ve added to its audience will be able to see the stories posted there.
As long as a story is posted to at least one public album, it is a public story.
Here a user named Jody Simpal has three public albums, called Main, Family, and Travel, and two private albums, called For Me Only and Friends. The Post to Albums menu on the left is the one Jody sees when creating or editing a story. Unless she changes it, the story will be posted in her public album called Main. The Post to Storylines menu on the right is the one she sees after a story has been published. In this case, it is showing that the story is in the private album called For Me Only, and Jody has the opportunity to change her mind about where it should appear.
You can add a story owned by somebody else to a album of yours. This is called borrowing, and it works best when the story you borrow is public.