dadurch
thereby
Introduces a result or consequence of something mentioned before; therefore, as a result.
Er hat hart trainiert und dadurch den Wettkampf gewonnen.
He trained hard and thereby won the competition.

thereby / through it
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thereby
Introduces a result or consequence of something mentioned before; therefore, as a result.
Er hat hart trainiert und dadurch den Wettkampf gewonnen.
He trained hard and thereby won the competition.

'Dadurch' is made up of 'da' and 'durch'. The literal meaning 'through that' helps you understand the figurative meanings too: a consequence arises 'through a cause', or a result is achieved 'through a method'.
Der Eingang war schmal, aber wir passten dadurch.
The entrance was narrow, but we fit through it.
As an adverb, 'dadurch' can stand at the beginning of a sentence (position 1). In this case, the verb follows directly in position 2 (inversion).
Die Straße war gesperrt. Dadurch mussten wir einen Umweg fahren.
The road was closed. As a result, we had to take a detour.
To describe a method, 'dadurch' is very often combined with a subordinate clause that begins with 'dass' (that) or 'indem' (by). 'Dadurch' then introduces, in the main clause, the result of the action described in the subordinate clause.
Er verbesserte sein Deutsch dadurch, dass er jeden Tag deutsche Nachrichten schaute.
He improved his German by watching German news every day.
The spatial meaning 'through this place' is always tied to a concrete context. An opening, space, or passage that 'dadurch' refers to must have been mentioned before.
Das Tor stand offen und die Schafe liefen einfach dadurch auf die Weide.
The gate was open, and the sheep simply ran through it into the pasture.
so that / with it
'damit' and 'dadurch' can both show how a goal is achieved or what effect an action has. 'damit' often emphasizes the means: you use this thing, or you do something with a specific goal. As a conjunction, 'damit' introduces a purpose clause. 'dadurch' tends to emphasize the result or the way something happens: something happens through this action. Learners confuse the words because both can sometimes feel like 'auf diese Weise' (in this way). If you want to state the purpose, 'damit' often fits. If you want to state the result, 'dadurch' often fits.

Sie fährt jetzt mit dem Fahrrad zur Arbeit, dadurch spart sie jeden Monat Geld.
She now rides her bike to work, and as a result she saves money every month.
Ich stelle den Wecker früher, damit ich den Termin nicht verpasse.
I set the alarm earlier so that I don't miss the appointment.