Magento 2 enhances theme and skin localization. It distinguishes themes, which define layout and blocks, from skins, which define styles and colors. In Magento 1, skins were separate from themes and could be inconsistently configured. Magento 2 improves this by allowing skins to provide localized files and configuring both theme and locale in a single field. This avoids duplicating skin files and makes localization more consistent.