A theme controls broad presentation and site structure; a template controls the layout used for a particular kind of page or content.
In plain English
This belongs to the machinery or experience of a website. You do not need to know how to code it. You need to understand what changes for the visitor, the editor or the person maintaining the site: clarity, speed, accessibility, stability or how easy the site is to change later.
A real example
A site may have one overall theme but different templates for blog posts, product pages and archives.
What matters is not whether the technology sounds advanced, but whether the result is felt as a clearer, faster, safer or easier website.
Why it matters
Templates make repeated content types consistent without rebuilding every page from zero.
Technical choices eventually become human consequences. A setting that sounds obscure can decide whether a page loads, whether someone using a screen reader can use it, or whether a future redesign becomes simple or painful. That is the level at which the term becomes useful.
When do you actually need to care?
You need to care when the site is slow, difficult to use, hard to edit, inaccessible, unstable, expensive to maintain or becoming dependent on one fragile technical choice. You also need to care before migrations, redesigns and new integrations, because small technical decisions can become large constraints later.
Useful questions to ask
- What will a visitor or editor notice if this is done well?
- Who is responsible for maintaining it after launch?
- What happens if the technology stops working or needs to be replaced?
What should you do with this?
Ask what changes for the visitor, who is responsible for maintaining it, and what happens if it fails. If nobody can answer those three questions, the implementation is probably more complicated than it needs to be.
What this does not mean
A template is not necessarily a cheap generic website. A bespoke design system can use templates too.
The short version
Theme is the wider system; template is a repeatable layout within it.
Related: dynamic content and WordPress.
Further reading: WordPress on themes.