Via Starwars.com:

FROM Q-TIPS WATCHING A PODRACE TO AN 18-INCH-TALL MONSTER, PRACTICAL EFFECTS HAVE A LONG LEGACY IN A GALAXY FAR, FAR AWAY.
Advances in technology mean digital effects can transform the landscape and scope of a film more than ever before, and those effects are constantly influencing the way films are made. Digital effects can sometimes accomplish what practical effects cannot, and they can enhance them, too. But before digital effects reached a certain level of sophistication, practical effects ruled the day. They’re still extensively used in the film industry — often in concert with CGI — and likely won’t ever disappear, and the Star Wars saga helped take practical effects to new heights. These are some of the many cool practical effects used in the Star Wars films:

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