Instagram Access Token is a set of tokens that enables any third party applications to access your content on their end. By giving, or assigning this token set, you are allowing any application to view your content, and fetch it through your widgets. It's required for these applications to access your Instagram content from your Tumblr blog. However, this token is not your alternative passwords, or any sort.
Getting your Instagram Token is easy. You can use Pixelunions' tool to get your access token. Here's the link! Have any questions? Feel free to comment!