How can templating be used effectively in PHP to avoid escaping errors and improve code readability?

To avoid escaping errors and improve code readability in PHP templating, it is recommended to use a templating engine like Twig. Twig provides automatic escaping of variables to prevent XSS attacks and makes the code more readable by separating the logic from the presentation layer.

```php
// Example using Twig templating engine
require_once 'vendor/autoload.php';

$loader = new \Twig\Loader\FilesystemLoader('templates');
$twig = new \Twig\Environment($loader);

$template = $twig->load('index.html');
echo $template->render(['name' => 'John Doe']);
```
In this code snippet, we are using the Twig templating engine to load and render a template file called 'index.html'. The variables are passed to the template using an associative array, and Twig takes care of escaping them automatically. This helps to prevent escaping errors and improves code readability.