A wiki template is not really what you would call a "template" in real world. In a wiki, we usually call that a "boilerplate".
What is a Template?
A wiki template is instead an article, just like any other, but with the ability to be 'transcluded' onto other pages. This means that if you have made a table with links for all things concerning a given subject, that could be good for navigating, you can take that table, put it into a template, and then just use a wiki template shortcut to transclude that navigation box on all related articles.
Other uses of the template can be to just add automatic formatting such as styles or classes to text, similar to how CSS works. It could also be a table of stats from the game, which you might want on more than one page.
In some cases, templates can be used with variables, and inside other templates. It might look quite complex, and you shouldn't edit what you don't grasp yourself, but they often save a lot of time in the end, as that work needs not to be re-done again, and can easily be edited on all pages the item is shown.
How does it work?
In order to create a template, you start a new article, and naming it like this: Template:New Template. All the content in that article will then be easily transcluded to any other page through using the code to call it in: {{New Template}}. That template article content will then replace the "{{New Template}}" snippet.
Template features
Templates work like any other wiki page, and you can use any formatting that you can use elsewhere. In addition, there are two tags you can use for your template:
- <includeonly></includeonly>
- <noinclude></noinclude>
Everything you mark to "includeonly" will only be shown on the page where you call it from. Anything outside of this tag will not show on the transcluding page. The "noinclude" works opposite, and anything written in that tag will be shown only on the actual template page (Template:New Template, for example).
The "noinclude" tag is great for sorting the template into categories, as well as making some instructions for other users of your template on how it works. This is especially important if the template is more advanced or complex. The "includeonly" tag is also usually used when making help pages, and helping the way to explain template functionality by removing complex code from sight.
You can ask one of the DiabloWiki sysops for more information.