To annotate drawing objects (geometry drawn with AutoCAD commands), you follow a two-step process. You lay out the annotation design in an annotation template. Then you specify the objects to attach the annotation to. The annotation replaces the template with information specific to each object you specify and displays it as a label on those objects.
An annotation template is a type of AutoCAD block. It can contain text and graphics. The text can include static labels as well as placeholders. Actual data values replace the placeholders at display time.