Operating systems and applications need to know where to find files:
many files that they need are "just named" - the user doesn't
necessarily know where they are, but knows to ask for them.
The commonest case, of course, is the commands whose names you type to
a shell (yes, even Windows' "MSDOS prompt") are using a shell to read what
you type: many of the commands simply involve loading and executing a
file, and the PATH variable tells the shell where to find those files.
Modern TeX implementations come with a bunch of search paths built in to them. In most circumstances these paths are adequate, but one sometimes needs to extend them to pick up files in strange places: for example, we may wish to try a new bundle of packages before installing them 'properly'. To do this, we need to change the relevant path as TeX perceives it. However, we don't want to throw away TeX's built-in path (all of a sudden, TeX won't know how to deal with all sorts of things).
To extend a TeX path, we define an operating system environment variable in 'path format', but leaving a gap which TeX will fill with its built-in value for the path. The commonest case is that we want to place our extension in front of the path, so that our new things will be chosen in preference, so we leave our 'gap to be filled' at the end of the environment variable. The syntax is simple (though it depends which shell you're actually using): so on a Unix-like system, using the bash shell, the job might be done like:
export TEXINPUTS=/tmp:while in a Windows system, within a MSDOS window, it would be:
set TEXINPUTS=C:/temp;In either case, we're asking TeX to load files from the root disc temporary files directory; in the Unix case, the "empty slot" is designated by putting the path separator '
:' on its own at the end
of the line, while in the Windows case, the technique is the same, but
the path separator is ';'.
Note that in either sort of system, the change will only affect instances of TeX that are started from the shell where the environment variable was set. If you run TeX from another window, it will use the original input path. To make a change of input path that will "stick" for all windows, set the environment variable in your login script or profile (or whatever) in a Unix system and log out and in again, or in autoexec.bat in a Windows system, and reboot the system.
While all of the above has talked about where TeX finds its macro files, it's applicable to pretty much any sort of file any TeX-related program reads - there are lots of these paths, and of their corresponding environment variables. In a web2c-based system, the copious annotations in the texmf.cnf system configuration file help you to learn which path names correspond to which type of file.