Save site as template option is used to create multiple sites based on the template which you have saved.
To create site template, go to [settings] [Site settings] click on "Save site as template" under Site actions.
Provide below details to create the site template.
Check include content check box to include the site content when you create the sites based on the template which you are creating.
After providing the details, once you create the site template, it will display the details shown in the below screenshot. Click on "solution gallery" to see the template that has been created.
In the below screenshot you can see that the template has been created and status is activated, so that means it's ready to use, you can go-ahead and create sites out of that template.
While creating the sites you can observe the site template name under the custom tab in Template selection.
In this article you have learned how to create site templates and sites based on the site template.
Devendra Velegandla is a five-time recipient of Microsoft's Most Valuable Professional (MVP) award (2014-2019) for Office Apps and Services, Office Servers and Services MVP and SharePoint Server. He received the MCC award for his contributions in Microsoft MSDN/TechNet forums. He loves sharing articles, videos, and tutorial on SharePoint and Office 365.