A Word template is simply a standard Word document that can be re-used as the basis of other Word documents.
Whereas a Word document is stored with the suffix .doc (or .docx) a Word template's suffix will be .dot (or .dotx), and in most instances these suffixes are interchangeable.
For example you might rename a standard Word letter like "Terms of Business sent to Fred.doc" as "Terms of Business.dot", in which case it'll become a template for general use instead of a specific document to Fred Bloggs. You might similarly create templates for other standard forms and letters, such as “Please find your policy documents enclosed”.
Note that Durell templates differ from normal Word ones on two counts...
Templates are essential for mail shots and email shots. A single template will contain the text for all of the resulting documents, though the mailshotting process will individually address each one, and optionally incorporate any other required personal data.
In fact every time you start a blank new document in Word you are using Word’s own default template, called “Normal.dot”, which pre-sets the margins, font and point size. Instead of re-setting these each time you start Word you should simply re-set “Normal.dot” to your preferences and they will all appear automatically thereafter.
(See also Templates, New)