The order system is driven primarily by hook_order, the power house that lets you interact with an order object during any stage of its creation or processing. This hook is invoked at various times when the order is being created, saved, loaded, and processed.
The order system also defines a core way to display and modify order information through the use of order panes. A pane is one section of the order screen like Ship to or Products. These may be rearranged/configured through the order settings pages or replaced by panes defined in contributed modules.
When a customer goes through checkout, an order is first created when they review it prior to confirmation. This is so that information may be easily added to the form on the checkout screen if they need to go back to modify their information. The order's status is set to In Checkout, and it is updated to Pending once checkout is complete. This lets store administrators browse orders that were never checked out and make follow-up calls to customers to try and make the sale.