What is the meaning of pydantic models(schemas) in Python while building an API with FastAPI
Pydantic schemas define the properties and types to validate some payload.
They act like a guard before you actually allow a service to fulfil a certain action (e.g. create a database object). I'm not sure if you're used to serializers, but it's pretty much the same thing except Pydantic and FastAPI integrate with newish Python 3 properties (see type checking) which makes it somewhat easier to achieve the things you used to do with framework builtins/libraries.
In your example UserCreate only requires a password and email address so inheritance makes your code more DRY.