In Django, environment-based settings mean the app reads configuration values from environment variables. The app starts by reading these variables using os.getenv, providing default values if they are missing. For example, SECRET_KEY is read from DJANGO_SECRET_KEY or uses a default secret. The DEBUG setting is read as a string and converted to a boolean by comparing to 'True'. After reading these, Django loads base settings and overrides them with environment values. This approach keeps sensitive info like secret keys out of the code and allows easy changes for different environments like development or production. The execution table shows each step: starting the app, reading variables, loading defaults, overriding, and applying final settings. Variables like SECRET_KEY and DEBUG update step-by-step, ensuring the app runs with correct configuration.