How does a local or anonymous class defined inside a static method or static context differ from one defined inside an instance method, regarding what enclosing state it can access?

A local or anonymous class defined within a STATIC method (or any static context) has no enclosing instance to implicitly reference at all (since a static method itself isn't associated with any particular instance), meaning it can only access the enclosing class's static members and any effectively-final local variables from that static method's own scope -- a local/anonymous class defined within a non-static (instance) method, by contrast, DOES have an implicit outer instance reference available, letting it additionally access the enclosing instance's non-static fields and methods, an important distinction that determines what's actually accessible from within the nested class depending on the enclosing context's own static-ness.

public class Outer {
    private int instanceField = 1;
    private static int staticField = 2;

    public static void staticMethod() {
        class StaticLocal {
            void show() {
                System.out.println(staticField);      // OK: static context, static field accessible
                // System.out.println(instanceField);  // COMPILE ERROR: no outer instance available here!
            }
        }
    }
}