Can't understand this

This is the easiest way to install Smarty. The point is that you need to load the Smarty.class.php file in every PHP file that uses Smarty templates, so if you have it in one folder of the PHP include path, you can create a Smarty instance for it by:

<?php 
require('Smarty.class.php'); 
$smarty = new Smarty; 
?>

can’t catch up with this part"so if you have it in one folder of the PHP include path, you can create a Smarty instance for it by:…"
anyone can explain it for me?thank you.

I prefer to use __autoload();

http://php.net/manual/en/language.oop5.autoload.php

Php allows for setting of the include path
http://php.net/manual/en/function.set-include-path.php

which means that when using require, include… types of functions , php will first look for files in directories which are set in the include path first

more about the include path:
http://www.php.net/manual/en/ini.core.php#ini.include-path