Your tblpeople is an image of your database.
Your peopleModel is an image of your table, you can see it as an extension. For example, here you can add additional properties that you do not have in your database (in other partial classes).
EDIT:
For example, we have a Database-First application with the following db-based class:
public partial class Product { public byte Type { get; set; } public string Language { get; set; } }
BUT we should have some more fields for display of the additional information. So, we created another partial class (in a separate file):
public partial class Product { public Terminology Terminology { get; set; } }
This way you can update your spreadsheet model from the database and add your extension from the autoupdated edmx file.
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