As a sewing machine runs, it makes continuous revolutions. 1 stitch requires 1 revolution. So, if your machine makes 10 stitches, it has completed 10 revolutions. If you turn over the hand-wheel on your machine and watch the needle, you can map the machine's revolution. As you turn the hand-wheel, the needle travels down below the needle plate, then up above the needle plate. Note that as the needles goes up and down, there is point where the needle is at its highest position and a point where the needle is at its lowest position. Once the needle reaches its lowest position, it begins to move upwards again.
Now imagine your needle is threaded and is in the highest position above the needle plate. As you begin to sew, the needle travels downwards with the top thread. The needle pierces the fabric and travels down below the needle plate. Eventually it reaches its lowest position. As it begins to move upward again, the thread forms a loop at the eye of the needle. As the loop is formed, the machine's hook travels directly above the eye of the needle and catches the thread loop. Then the hook makes a revolution around the bobbin. During the hook's revolution, a knot is formed between the needle thread and the bobbin thread. This knot is eventually cinched by the action of the take-up lever, which occurs as the needle reaches its highest.