Liquid is a template engine, which allows web designers to dynamically insert information (usually data retrieved from a database, like products of a shop) into so called templates. A template is normal HTML code, which contains placeholders for such information. Additionally most often loop constructs, conditional processing and variables can be used within such template engines.
Usually there will be a master template, which defines the HTML code which is identical (or at least similar) for all pages available. In the context of a FlickRocket shop, there usually are an index (welcome) page, a collection listening page, a product details page, etc. Therefore, the HTML code for each page type will be quite small, as the layout is rendered separately. In the layout master template, there exists a placeholder for the content to be filled (e.g. product page).