A: In eZ Publish templates define how any part of the content is presented. This goes for both actual content like an article and also parts like navigation, breadcrumbs etc. All templates can be customized (overridden is term in eZ Publish) and you can create, modify and delete the templates directly from the administration interface. Template management is permission managed.
Since eZ Publish is built for maximum re-use of components both within a single site, but also across several sites and projects, the templates are stored on the filesystem. This enables the use of a traditional source control system for the template code (like Subversion or GIT). This is a much more efficient way of working with templates both during development and deployment. For larger project this is the recommended best practice as several developers can work on the same project easily and you can manage different versions of the project and controlled (permission managed) roll-outs/deployments with simple roll-back.
Information on how templates are overridden for different content types can be found here:
http://doc.ez.no/eZ-Publish/Technical-manual/4.5/Templates/The-template-override-system/Template-override-example