A package is a related collection of files and directories that you wish to administer as a unit — e.g., Perl or Emacs — and that needs to be installed in a particular directory structure — e.g., with bin, lib, and man subdirectories.
A target directory is the root of a tree in which one or more packages wish to appear to be installed. A common, but by no means the only such location is /usr/local. The examples in this manual will use /usr/local as the target directory.
A stow directory is the root of a tree containing separate packages in private subtrees. When Stow runs, it uses the current directory as the default stow directory. The examples in this manual will use /usr/local/stow as the stow directory, so that individual packages will be, for example, /usr/local/stow/perl and /usr/local/stow/emacs.
An installation image is the layout of files and directories required by a package, relative to the target directory. Thus, the installation image for Perl includes: a bin directory containing perl and a2p (among others); an info directory containing Texinfo documentation; a lib/perl directory containing Perl libraries; and a man/man1 directory containing man pages.
A package directory is the root of a tree containing the installation image for a particular package. Each package directory must reside in a stow directory — e.g., the package directory /usr/local/stow/perl must reside in the stow directory /usr/local/stow. The name of a package is the name of its directory within the stow directory — e.g., perl.
Thus, the Perl executable might reside in /usr/local/stow/perl/bin/perl, where /usr/local is the target directory, /usr/local/stow is the stow directory, /usr/local/stow/perl is the package directory, and bin/perl within is part of the installation image.
A symlink is a symbolic link. A symlink can be relative or absolute. An absolute symlink names a full path; that is, one starting from /. A relative symlink names a relative path; that is, one not starting from /. The target of a relative symlink is computed starting from the symlink's own directory. Stow only creates relative symlinks.