The spontaneous pattern formation and morphological transitions in thin liquid films on chemically heterogeneous, periodic patterned surfaces are studied based on nonlinear simulations. Conditions are identified for the creation of desired mesostructures in soft materials by spontaneous dewetting on patterned substrates. On a surface consisting of alternating less and more wettable stripes, dewetting is suppressed on some less wettable stripes when their spacing is below a characteristic length scale of instability (lambda(h)), which is smaller than the spinodal length scale of instability. Ideal templating, i.e., replication of the substrate surface energy pattern in the thin film morphology occurs only when (a) the periodicity of substrate pattern is greater than lambda(h), (b) width of the less wettable stripe is within a range bounded by a lower critical length, below which no heterogeneous rupture occurs, and an upper transition length above which complex morphological features bearing little resemblance to the substrate pattern are formed, (c) the contact line eventually rests close to the stripe boundary, and (d) the liquid cylinders that form on the more wettable stripes remain stable. Conditions (a) and (b) ensure the onset of dewetting at the center of every less wettable stripe, and conditions (c) and (d) ensure full coverage of every more wettable site by liquid cylinders. The above conditions for ideal templating on a periodic heterogeneous substrate can be engineered by modulating the stripe-periodicity and width, film thickness and the wettability gradient across the stripe boundary. For example, ideal templating on a given substrate always occurs at an intermediate film thickness, since dewetting is suppressed at some less wettable stripes at higher thickness and multiple dewetting sites form on less wettable stripes at lower thickness.