The abbreviation DTD stands for "Document Type Definition."
A DTD file defines the different components (elements, tags, attributes, entities, PCDATA, and CDATA) that make up an XML document. For instance, it defines the number and type of attributes or values that can be used for an individual element.
One of the main advantages of using a DTD to define the different building blocks of an XML document associated with it is that the information in the DTD file can be shared with multiple XML files. Any XML document written based on a certain DTD can then be validated, or, in other words, compared to the DTD to see if it follows the rules established in it.
At the Walt Whitman Archive, we use validating (or "parsing") our markup against the main so-called Whitman DTD as a tool to see whether our files are properly encoded. Though our DTD implements the TEI standard, the Whitman Archive DTD is unique, customized for our specific project needs.