Planning of using t4 template in a production environment. I have not used this before either. I want to know if anything is required to be installed on the production server, are there any settings to be configured on the server, etc.
Assuming you're talking about preprocessed (runtime) templates, then you don't need anything special on the server.
If you're talking about design-time (regular) T4 templates, then it's not a supported scenario.
If you're talking about an ASP.Net MVC website scaffolded via T4, then T4 isn't present in production.