To a certain degree, the point of a tool is that the user does not need to know about the details, but if you are interested...
Suppose you have this tree structure in your "original" project:
Documentation/README.txt
hello.c
Makefileand then somebody else has this structure in his project (in your case, it may happen to be stored in SVN but once it is slurped in a git repository, it does not matter):
goodbye.c
Makefile
Further suppose that you would want to end up with this tree structure:
Documentation/README.txt
Makefile
hello.c
imported/Makefile
imported/goodbye.ci.e. you would want to move stuff that came from the other project in imported/ hierarchy. There may be many other files, and even subdirectories, in the other project, but they all are shifted one level down and placed in imported/ hierarchy.
The first four steps of the howto is to create such a final tree structure and make a merge commit out of that tree.
After you update your project (which now has both the original files such as hello.c etc., may have added new files, and may even have updated stuff inside imported/ hierarchy) and the other side updated their project (e.g. it may have updated goodbye.c whose change you would want to carry over to your imported/goodbye.c, or it may have added a new file welcome.c, which you would want to import as imported/welcome.c), you would invoke "pull -s subtree", which in turn runs "merge -s subtree".
The subtree strategy first compares the shapes of two trees being merged, and tries to find how much they have to be shifted to match. Your tree may now have:
Documentation/README.txt
Makefile
hello.h (added)
hello.c
imported/Makefile
imported/goodbye.cwhile the other side may now have:
goodbye.c
Makefile
welcome.c
The subtree strategy notices that by prefixing "imported/" in front of the paths, the tree from the other side will match the shape of the subtree you have under "imported/". Thus it can pair:
their "goodbye.c" with your "imported/goodbye.c"
their "Makefile" with your "imported/Makefile"
their "welcome.c" with your "imported/welcome.c"and merge the changes. The common ancestor commit of this merge will be the initial merge you made with the first 4-step, so the three-way merge logic would notice that there wasn't "welcome.c" in the beginning, they added that path, while you did not do anything to the path that corresponds to it (namely, "imported/welcome.c"), so the new "welcome.c" file from the other project would simply be copied as "imported/welcome.c" to your tree, and the change they made to "goodbye.c" and your changes you made to your "imported/goodbye.c" will be merged and result is recorded in your "imported/goodbye.c".
If "compares the shape and figures out how much to shift" makes you feel uneasy (and it probably should), you can give an explicit directory prefix as the backend option "subtree" (see "git merge help" for details).