If you are using a standard WordPress theme other than a custom theme developed exclusively for you, chances are that you will lose all the modifications that you made to your theme, when the original theme is modified by the theme developer.
As most of you using ready-to-use WordPress must have noted that you always want to make changes in the look and appearance of the theme. The easiest way to do such changes without changing the core design or structure is to edit the CSS style sheet. For example, you do not like the font Verdana and want to replace it with Arial, you simply add Arial as the first font in the appropriate places in the style sheet. And you are done and find your site or blog showing up with your desired font.
In the above way, you can change font sizes, colors, and many other things just by editing the style sheet. With changes in some other files, you can entirely change the look and feel of your site. Some people may love to present their site in the most aesthetic way and experiment with the themes and style a lot. This may be required even in a custom designed theme, as you find something or the other always needing improvements.
So, you have done everything and all on a sudden everything is lost! You feel frustrated. To avoid this create a Child Theme, the original theme remaining as the parent theme. By doing this, when the parent theme is updated by its developer, you can still continue with your own modified theme as your modifications are automatically preserved, as the Child Theme settings override the Parent Theme, as the Child Theme inherits the functionality of the Parent Theme.
To create Child Theme, simply create its own directory named as â€˜original theme-child (or anything you like), and place your modified style.css file in it, and you have a child theme of your own! You can do so without modifying the styling and layout of a parent theme, with some understanding of HTML and CSS. Such a Child Theme works as good as your own custom designed theme and it is not affected when the parent theme is updated. Your newly created child theme can have as little as a style.css file to as much as any full-fledged theme contains with the optional additions of functions.php, template files and other files. For a good understanding of creating your own Child Theme and examples of changes and scripting, visit official WordPress Codex for Child Themes.