The overly simplified short answer is that Steem interlocks several related but different cryptocurrencies.

STEEM is the most fundamental (if I understand correctly). It is inflationary, meaning new STEEM is being produced over time. The amount that you receive for your post comes out of the pool of newly minted STEEM based on the voting activity of other members and the other posts that received votes in the same time window.

I can't say I fully grasp it myself, but that's what I know. Here's a post with more info: https://steemit.com/steemit/@shenanigator/updated-steemit-faq-part-4-payouts