The template method pattern defines the skeleton of an algorithm in a method, deferring some steps to subclasses. This allows subclasses to redefine certain steps of the algorithm while preserving its overall structure. For example, in a game application, the template method pattern could define a playOneGame method containing the overall game play logic, with abstract methods for game initialization, player turns, and end checking that subclasses implement differently for each specific game like Chess and Monopoly. Hook methods allow subclasses optional control over whether to implement additional template method steps.