Templates are managed by Joomla! in the same way as any other extension. But sometimes you may occasionally run into a situation where you cannot install a template in your Joomla 2.5 site with Upload Package File in the Extension Manager. And again and again you see this same message that the system could not find xml setup file (“JInstaller: :Install: Cannot find XML setup file”). You have to use alternative template installation methods, for example, installation via FTP.