Velocity Template Language (VTL) files, identified by the '.vm' extension, are used to create dynamic web pages, emails, and other content. Velocity is a Java-based template engine that allows web designers to reference methods defined in Java code. This separation of presentation (HTML) from application logic (Java) promotes cleaner code, easier maintenance, and improved collaboration between developers and designers. The Velocity engine processes the template files, replacing Velocity Template Language directives (e.g., variables, loops, conditionals) with data from the Java application. The resulting output is then sent to the user's browser or used for other purposes, such as generating reports or sending personalized emails. Velocity is often used in conjunction with web frameworks like Apache Struts and Spring MVC. The template files contain placeholders and control structures that are dynamically populated with data at runtime, allowing for the creation of customized and interactive web experiences. Velocity is designed to be simple and easy to learn, making it a popular choice for web development projects of all sizes.