Dynamic templates in Elasticsearch allow automatic mapping customization for fields during indexing. When a document is indexed, each field is checked against the dynamic templates defined in the index mapping. If a field matches a template's criteria, the mapping specified in that template is applied to the field. If no template matches, Elasticsearch applies its default mapping based on the field's data type. For example, a template can specify that all string fields should be mapped as keyword type instead of the default text type. This process repeats for every field in the document until all are mapped. This approach helps manage dynamic data with flexible mapping rules.