Basically it is the process of laying up the hull in horizontal layers.
You cut the bottom piece, according to a plan,. Then you cut the next horizontal section up, and cut the center out of it to begin a hollow space.
You "butter" the bottom of the second piece with glue, and lay it on top of the first piece. You would continue to do this until you reach the weather deck of the ship you are building.
What you have is a stair stepped hull with the correct "plan" view when seen from directly above, or below. The steps are then ground, or sanded off until you have a nice smooth ships hull.
I will see if I can post some diagrams later.