From Joomla! Documentation
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The models encapsulate the data used by the component. In most cases this data will come from a database, either the Joomla database, or some external database, but it is also possible for the models to obtain data from other sources, such as via a web services API running on another server. The models is also responsible for updating the database where appropriate. The purpose of the models is to isolate the controller and view from the details of how data is obtained or amended.