I am not an expert in CAD but for me a template CAD file is a blank drawing where you fix all the design variables as you like. For instance, number and names of layers and their colors, units (mm, cm, m, in, ft, etc), tools, etc.
Drawing file is a finished drawing, done by you using the template drwg file or done by someone else where all settings can be different from yours
Before there were "template" drawings, we tried to save all our settings on "standard background" drawings for this purpose, but they were continually renamed for specific uses and the original "standard background" drawings were overwritten and lost forever.
There is no magic to a template file. They are identical files to drawing files. They have different extensions. You can rename a DWG file with the DWT extension and vice-versa with no ill effects. DWT template files are intended to be used when you start a new drawing and they resist being saved over, prompting you for a new name that will automatically have a DWG extension (unless you specify another extension or file type). If you have the discipline you can open any DWG drawing and do a SaveAs with the same effect and call it a template drawing with or without the DWT extension. Template drawings have their own folder which makes them easier to find than DWG files since the program knows where to go for DWT files. They are identical in usage to Word, Excel and many many other programs that use templates.