ESO is said to have one big server will it work with so many players?

I believe it will, it's a MEGASERVER.
And Xbox players will have an own server, Playstation players too.

No its not just 1 big server, as in every other MMO there are a lots of server then only difference is you dont see them and you can switch between them.

So, it won't be cross platform?

Correct

Nope, the game will not be cross-platform.

So if its will be megaserver then there we will see instances.

Hope you won't be able to change instance everywhere you want and for changing will be a lot of limitations.

It'll dynamically group players into phases together, it essentially takes away player lock to a server and allows the users to automatically and fluidly change servers.

Different kind of instancing. One balances how many people per server/shard, and the other is more often about balancing how much the client has to load and how it handles loading new areas etc.