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In the context of Wikipedia, metatemplating involves the use of templates as a base to generate other templates. Some metatemplates work like any other template, and are transcluded. Others generate wiki markup on-the-fly; these are macro metatemplates, and are substituted. Metatemplating enables standardized templating, whereby many templates can utilize a common set of components and formats.
Macro metatemplates carry the normal disadvantages of substitution, but they also take advantage of two strong points: substitution is ultimately more efficient, and it allows for the dynamic generation of wiki markup. This makes it suitable for more intricate systems than those created with transclusion.