Question about the loop?

Hi all,

I have a new project that I am working on in which I am attempting to learn to use WordPress as a CMS. The homepage for my project will contain post from two categories in separate columns the code for which I think I know now.

My question relates to creating the archive pages that will contain the full history of all posts in each category and the page that displays a single post from each category.

In all the examples I have read you use the loop to display the posts, but I do not understand how WordPress knows which archive and single page template to load when a post link for either category is clicked as the beginning of the loop always seems to start the same:

<?php if ( have_posts() ) : while ( have_posts() ) : the_post(); ?>

I hope this question makes some sense as it’s harder to describe in writing.