Thank you for the responses. Atlassian provided the answer:
The reason this user cannot edit the template is because they do not have proper permissions. In order to do so, they will need space admin access at a minimum as described at the following page.
* [Working with Templates|https://confluence.atlassian.com/display/DOC/Working+with+Templates]
I was hoping to allow users to edit templates but not be able to administer the space.
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