This template uses playcanvas-sync as an interface between playcanvas editor and local setup. It's not perfect, but it is as real-time as it can get currently with their api limitations. It's not mandatory to use the editor, the work can be done with just engine, but I want to use it to the fullest so I'm using both in the template.
First download it from https://github.com/playcanvas/playcanvas-sync and go through installation. https://playcanvas.com/account is where you get your api key.
For some reason the sync script uses absolute directory, so the easiest way to make it work is to save the .pcconfig file in your computer's home directory /.
Navigate to the dist folder directory you want to dedicate to playcanvas projects, do a process.cwd() and copy the path to "PLAYCANVAS_TARGET_DIR" setting in pcconfig.
After that just run npm run watch and it should work properly from there on.