The schema is like a program or script. It tells the code generator what to do, when, and how. Libero executes the schema from start to end.
The code generator has a few ideas about what it has to generate, but the schema usually has to tell it more. For example, the schema can say 'please generate numbers with 3 digits like this: 001'.
The schema decides what files to generate, under what conditions. It decides what they are called, and what they contain.

This is the basic logic of Libero's code generator:

Read the schema line by line; ignore comment lines.
If the line contains a schema command, execute the command.
If the line does not contain a command, write it to the current output file, if any. If no output file is open, discard it.

This is a 'hello world' schema:

:echo "Hello, World."

This is more realistic schema fragment:

!  Example Libero of schema
!
:if not exist $source.c
:echo "lr I: creating skeleton program $source.c..."
:output $source.c
/*===============================================================
 *  $source.c   description...
 *  Written:    $date       $author
 *  Revised:    $date
 *  Skeleton generated by LIBERO $version on $fulldate, $time.
 *===============================================================*/

#include "$dialog.d"                    /*  Include dialog data  */

/********************   INITIALISE THE PROGRAM  ******************/

MODULE $"initialise_the_program" (void)
{
    $"the_next_event" = $"ok_event";
}
:close
:endif

How does this schema work?

Any lines that starts with '!' is as a comment. The code generator discards all such lines.
Libero looks for names starting with '$', and replaces these by the value of that variable. Libero supplies a set of standard variables like '$date' and '$source'. You can also define your own variables.
When a line starts with ':xxxx', this is read by Libero as a schema command. Typical commands are ':if', ':echo'. ':open'. Command lines can include variables.
Any other line is copied to the currently-open output.

When Libero replaces variables, it keeps the text as aligned as possible by treating white-space (blanks or tabs) as elastic. For instance, here is some 'C' code before and after replacement. Notice how the right-hand margin does not move:

/*  Source generated on $date - Libero $version                */
/*  Source generated on 93/07/12 - Libero 2.10                 */

A variable name ends with the first non-name character (A-Z, a-z, 0-9, _). To mark the end of a variable name that is 'pasted' to some text, use a '\'. For instance, this is a line before and after inserting the $source variable:

    :output $source\d.d
==> :output myprogd.d

If you capitalise (at least) the first letter of a variable name, Libero inserts the whole value in uppercase. For example:

    :output $Source\d.d
==> :output MYPROGd.d

To output a name that matches the current -style setting, do this (e.g. -style=caps):

    $"the_next_event" = $"ok_event";
==> TheNextEvent = OkEvent;

To output a '$', use two '$'s together:

    $"the_next_event" = $$$"ok_event";
==> TheNextEvent = $OkEvent;