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In this Vocabulary Worksheet Factory 5 video tutorial, the presenter demonstrates how to work with templates to create vocabulary documents. Templates are useful as they allow for the quick creation of visually appealing vocabulary worksheets without the risk of altering the original document. Unlike a saved document, where one might mistakenly overwrite the original by not using the "Save As" function, templates open as new documents, preserving the template itself. The presenter has an existing document ready and aims to create a reusable template for yearly use, ensuring updated and consistent vocabulary materials.