How exactly do i use localization?

I have already used localization before, however it is confusing, because when i translated one of the games i worked for, a lot of things it told me to translate were weird, like sometimes i think it says {item1} and it confuses me, but i also wondered, does it also let you translate text that’s inside a script for example you changed the text of something inside a script, also I’m wondering if autolocalise means to have the game page let you translate whatever it thinks has to be translated, and if i disable it, will it do anything?

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What you’re seeing there is very likely a localisation format string, the best place for you to learn more about them would be here.