In DNN, a Theme is everything that determines the whole look and feel of a page. This includes things like

1. Colors and logos
2. Arrangement of panes (the placeholders for content on the page)
3. Placement of header / footer
4. Navigation
5. Footer contents

Since the theme "wraps" everything in the page, it will also be responsible for hidden page-wide functionality like

1. page title
2. metadata
3. loading global javascript or css files