Wayland is a protocol for a compositor to talk to its clients as well as a C library implementation of that protocol. The compositor can be a standalone display server running on Linux kernel modesetting and evdev input devices, an X application, or a wayland client itself. The clients can be traditional applications, X servers (rootless or fullscreen) or other display servers.
The wayland repository includes a compositor which can run as an X client or under Linux KMS and a few clients, but both the compositor and clients are essentially test cases.