How do layered haircuts work?

I don’t have a whole lot of hair, but when it gets long it still needs to be cut. I just had a haircut and the woman doing it explained how she was layering the hair. The nerd in me loved the explanation, but I don’t get why the process worked so well. She said something about cutting the hair on top shorter than the hair on the sides and said something about length and volume and making my hair look fuller. This can’t be rocket science, but I can’t visualize how this makes a difference.