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In this Vocabulary Worksheet Factory 5 video tutorial, the presenter demonstrates how to work with templates for creating vocabulary documents. Templates serve as a useful tool for efficiently generating well-designed worksheets, allowing users to avoid the risk of altering the original document by using the "Save" function instead of "Save As." Instead, templates open as new documents, protecting the original template from accidental changes. The presenter shows an already created document as a starting point and discusses using templates for annual vocabulary needs. By updating or deleting templates, users can maintain their resources without the risk of modifying the templates themselves.