When you use the extends template tag, you’re saying that the current template extends another — that it is a child template, dependent on a parent template. Django will look at your child template and use its content to populate the parent.
Everything that you want to use in a child template should be within blocks, which Django uses to populate the parent. If you want use an include statement in that child template, you have to put it within a block, for Django to make sense of it. Otherwise it just doesn’t make sense and Django doesn’t know what to do with it.
The Django documentation has a few really good examples of using blocks to replace blocks in the parent template.
https://docs.djangoproject.com/en/dev/ref/templates/language/#template-inheritance