What is the difference between Library Shapes and Templates?

Library shapes are standalone shapes that are not linked to any other object. Users can make changes to each shape without affecting other shapes.
Templates are Master shapes that control the configuration of all their instances. By dragging and dropping a Master Template shape onto the canvas, you create an instance of the Master Template shape. All instances are linked to the Master Template.
In order to change the shape properties of the instances, you must edit the Master Template Shape. When saving all your edits to the Master template shape, all instances of that template will be automatically updated.
Templates are used when you want to have many shapes that are identical but are mapped to different points. Using the Templates, you can update hundreds or thousands of shapes with one edit to the Master Templates. This is very useful when you have created a large number of shapes in your project and want to make a change to all instances.