The index.php file of a template can be thought of as a single web page that has placeholders for the main content of the page plus modules.

The basic setup of the "pages" of a Joomla site are actually determined by this one file.

The BODY element of an  index.php file generally contains either a TABLE or DIV elements that hold the various "positions" into which Joomla will load modules, plus a location where Joomla will load the main content of the page (e.g. an article or series of articles).