Headlines whose type is include are a special kind of pointer. They must have another attribute, url, that contains the address of another outline. When you're viewing the outline, it appears as if the outline being pointed to is part of the main outline.
When you expand the headline, Fargo fetches the outline that's linked to, and adds it underneath the original headline, as if the linked-to outline were part of the outline doing the linking. When the included outline changes, there's no need to modify the outline that's doing the including, it adjusts automatically the next time you collapse and re-expand it.
All outlines in Fargo are stored in an open format called OPML. Most outliners support this format, so you can include outlines created by those tools in Fargo, and vice versa.