Each component in an assembly has six degrees of freedom. It can move along the X, Y, and Z axes (translational freedom) and it can also rotate around these axes (rotational freedom).
Components are positioned by using constraints, which relate the entities of the components - such as edges, faces, vertices and UCSs - to each other.
How do constraints position components?
How do I know which constraints to use?
How many types of constraints are there?