Formats, on the surface, are pretty similar to templates. They’re just as easy to use and have been coded ahead of time. You select them via a bullet point list. They also alter the structure/style of your content. But where Templates work on Pages, Formats work on Posts. WordPress, by default, has a number of different formats for things like Text posts, quotations, images, videos, gallery, and so on. Themes may or may not utilize these, but if they do it’s a quick and easy way for displaying different types of post in a cohesive, attractive way.