Since we have covered some of the principles behind the Drupal theme system—most notably, the separation of concerns—let's go a bit deeper and take a look at how they are actually put into practice. This all starts with the theme hooks. Yes, Drupal always loves to call things hooks.
Theme hooks define how a specific piece of data should be rendered. They are registered with the theme system by modules (and themes) using hook_theme(). In doing so, they get a name, a list of variables they output (the data that needs to be wrapped with markup), and other options.
The modules and themes that register theme hooks also need to provide an implementation (one that will be used by default). In Drupal 7, this was done in the following two ways: either via a PHP function that returned a string (markup) or a PHPTemplate template file. Both were equally important...