A template is a page format, that has margins, fonts, headers and
footers, logos or any other kind of formatting that the template designer
wants to appear on each page that uses the template. You create a template much like you would a page. You add blocks with content, add stlyes. The one difference is that in a template you can specify a particular column as the "Content Area". What this does is that when you assign a page to use this template, all that pages content will be displayed inside the content area.
When designing a template you want to put all the content and styles that will be used on all pages in the template. This will save you a lot of work when you are designing and building your sites.