Stages are the different phases or rounds within an event.
This allows you to structure the event.
Usually the number of entries determines the structure you select.

These are some common situations:

1. Single stage
The event is just 1 draw, for example an elimination or round robin, and therefore only needs 1 stage.

2. Round robins with elimination (groups with playoff)
In the group stage all players are divided into groups or round robins
The best 1 or 2 players advance to the elimination draw.

3. Qualification and main draw.
De best players (based on ranking) are directly accepted into the main draw.
The remaining players first need to play the qualification and the best advance to the main draw. Those players are called qualifiers.
This is how grand slams are played.

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Of course you are free to setup any other situation yourself with multiple stages.