Drupal is a content management system. The system has mostly five layers. Let's understand how information flows between each of the system's layers.
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In development mode.Drupal
Entities were introduced in Drupal 7 first time. In Drupal, entity is a general concept . So it may be anything like noun(name, person, palace or a thing).
In Drupal each entity has a purpose to represent/show a specific type of data.
Like the user entity, it displays user information. Content entities display content-related data.
entities can be customized by adding fields to them called bundle.
bundles is a subtypes of an entity type.