How to edit templates locally?

It still works, I need to make it clearer in the UI. If you download the source code for an existing template as a zip by pressing 'Share' on the template editor, you can place the unzipped contents of the zip inside the Templates folder of your site, e.g. Your blog > Templates > Default

Here is the related (or duplicate) question thread: https://blot.im/questions/828

There used to be an option to switch templates so they would resolve inside the Blot folder (and sync back via Dropbox/Git). It's helpful to know that we can still download an archived template (I literally copy-pasted the code instead), but I don’t understand the part about “placing the unzipped contents of the ZIP file inside the Templates folder of your site”. Could you clarify this?