"html files are text files" means??

Answer 1

HTML can be written as plain text. It doesn't need to be compiled or otherwise modified.
So you could just write an HTML file in Notepad, just replace the ".txt" with ".html" and it'll be opened as a webpage. The browser knows what to do with it.

Answer 2

Html are .html files not a .txt file. But you can write html with a text editor.