template: Defines the HTML template inline within the component decorator:

@Component({
  selector: 'app-example',
  template: '<h1>{{title}}</h1><p>Inline template</p>'
})

templateUrl: Points to an external HTML file:

@Component({
  selector: 'app-example',
  templateUrl: './example.component.html'
})

Use template for simple, short templates and templateUrl for complex templates that benefit from syntax highlighting and better organization.