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Families is the plural of family. Families' refers to the possessive, so things belonging to families. The apostrophe is used to indicate that it is the possessive.


Here is a sentence using the plural:

"Ten families moved into the housing estate last week."


Here is a sentence using the possessive for many families.

"The families' homes were all very well decorated."


If you were talking about the house of just one family, it would be:


"The family's home was very well decorated."

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