A Staging site is a clone of a live (production) site. It’s usually not accessible to the public, and is used to test updates and changes before deploying to the live site. Having a staging site is an important process that allows you to experiment with redesigns and updates to your site without affecting the live site.
You may have heard of the terms ‘staging service’ and ‘staging environment’. Staging services are commonly offered by hosting companies, and essentially, this is just an automated method of creating a staging site and pushing the changes back to the live site.
Finally, you could also use a local install as a staging environment. It is still just a copy of a live site which can be then updated or changed without it affecting the live site. You could then use a plugin to transfer it back to the live domain, or move it back manually.
According to the Envato licensing terms and conditions you need a license per domain install of the theme. If you want to set up a single Staging site you can do so without the need for an additional license. It is however, required, that the Staging site is not publicly accessible and requires the person viewing it to log in to access it. This can be achieved by using a coming soon plugin, .htaccess restriction or similar.