basically what it does is this. You have your php script and you would assign a variable as a template.
So you can do something like
$header = header_template
$content = Content_template
then at the end you could out your entire page.
print(entire_page_template)
in your entire page template you can pass those variables down, so your entire page template may just be
$header
$content
$footer
etc....
So when you see those variables in the templates they are being passed from the server in a php script.
Thats just a simple way of putting it.
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