An application have a single build/test settings but it can have multiple targets.
Suppose you are creating an application. Now you are receiving same application with just UI theme changes. In that case no need to create another project but you can create another target in same project. In the same way a project can have multiple targets which produce framework, static library etc.
So, whatever target specific settings you need to make will be made under target settings. Common settings will be part of build settings. If you are putting values in both settings, target settings will get highest priority.
Hope this helps..