in place of / instead of

"in place of" and "instead of" are sometimes interchangeable.  However, "in place of" may be used only when we are talking about a substitution (замена) of one person or thing for another:

"The school hired Mrs. Ivanova in place of Mr. Petrov when Mr. Petrov became very ill."  [The idea is that Mr. Petrov already occupied the post, and that he was replaced by Mrs. Ivanova.  Заменили Петрова Ивановой.]

"instead of" does not require a substitution.  It may simply be a choice between two people or things:

"The school wanted to hire a Russian language teacher.  There were two candidates, Mrs. Ivanova and Mr. Petrov.  They decided to hire Mr. Petrov instead of Mrs. Ivanova."  [There wasn't a substitution.  Замены не было. There was merely a choice.]