what is the meaning of this paragraph " Creating a database can also erase information in an existing database and create a new database with the same name and physical structure." and what is the steps to perform this type of Oracle database creation
This is referring to the "create database" command (see below). The syntax allows specification of various parameters including the database name and specific files for system, other tablespaces, rollback and log files. If required this statement could be used to deliberately replace an existing database I.e. erase and replace it by overwriting the existing files.
https://docs.oracle.com/cd/F49540_01/DOC/server.815/a67772/create.htm#999193