I would like to know how Website Templates are Stored

I am working on the design of a project that will work on a similar technology. I would like to know how website templates are stored. How the modifications made to them are stored? How is it deployed with all the configurations made to it?

My Idea is that the template itself is stored in a file server. The modifications are stored in a folder which the templates know and references.

Please Enlighten me on the complete process if you are knowledgeable about it. I would really like to know more.

Thanks