Routing Territory [internally] creates a CRM Leads list by combining various Account and Lead filters. These Routing Territories will ultimately be used in Lead Router, thus Routing Territory is further refinement of Data Dictionary filters.
For the Account Lists, the [fuzzy] matched CRM leads are pulled into routing territories, while for Account Filter and Lead Filter, the matching CRM leads are pulled into routing territories.
The Lead Routing Territory module allows you to create the actual sub-segment of either the lead or account or contact or any object that you want to route, by combining different data dictionaries. It provides a layer of abstraction over the data dictionaries that you have created. For example, if you want to route leads, the lead routing territories should be created that can later be used in the lead router or the lead processing without routing. Similarly, the contact router will use the contact routing territories.
The purpose of Lead Routing Territory is to re-use the components that you have already created in the Data Dictionaries so that you can combine them in different ways to create different territories. For example, if you want to create two components in the data dictionary, the east lead and the west-us lead and another filter called healthcare-manufacturing. So you can now combine the healthcare-manufacturing vs the east and west and you can cross them to create four different routing territories.
Using routing territories you can apply the CRM account filters on the CRM lead filters. If you want to combine different kinds of filters against data dictionary filters, you can accomplish that in the Lead Routing Territory.
For more information refer to the following sections: