From Joomla! Documentation
A template is a type of Joomla! extension that changes the way your site looks. There are two types of templates used by the Joomla! CMS: Front-end Templates and Back-end Templates. The Front-end Template controls the way your website is presented to the user viewing the website's content. The Back-end Template controls the way your website's administrative tasks are presented for controlling management functions by a Joomla! Administrator. These would include common tasks such as: user, menu, article, category, module, component, plugin and template management.
See also: Extension types (general definitions)
There are two types of templates used in a Joomla CMS powered website.
Front-end templates change the way your site looks to average users. Most of the templates you use or install will be Front-end Templates.
Back-end Templates are much rarer than Frontend Templates. You will probably never need to change your Back-end Template. Back-end Templates allow you to change the way the administrator interface looks.
Joomla administrators should go to the page on Template Management for topics about managing your Joomla template or templates.
Joomla developers should go to the Template Development portal page for more topics on developing a Joomla template.