Just as with WordPress themes and Joomla templates, you need to be careful about using free Blogger templates found on the web because they might include malware or spam links to other sites which might harm your blog SEO. If the source is trusted, no cause for alarm.
For you to install a template successfully, it must be in the .xml format that is compatible with Blogger. Most sites where you can download free Blogger templates package the .xml file and some other files in a zip file. Hence, you will have to unzip the file before you can upload the .xml file to your Blogger blog. If you upload the .zip file directly to Blogger, you will likely get a blogger template upload error.
How To Install New Blogger Template
Now, let's assume you have the .xml file of the template you want to upload. Just follow me through the steps below, to install it to your Blogger blog:
==> Sign in to www.blogger.com and click on your blog in the dashboard
==> Back up your blogger template. Very Important!
==> Click on "Template"
==> Click the Backup/Restore button located at the upper right corner of the screen
==> A popUp similar to the screenshot below will appear
==> Click "Browse". Select the .xml file of the template you want to install
==> Click "Upload".
Preview your blog and if everything is fine, hit the 'Save Template' button.
If upload is successful, you should notice the changes once you view your blog in your browser.
Don't Know How To Unzip The Zip File You Downloaded?
In Windows and Linux, you can right-click the Zip file and select “Extract All…” Extract All will allow you to set a path for the extracted folder to go.
Select the location for the extracted folder. You will see the .xml file of the template in the folder.
I hope this helps.