The plugin system works through plugin definitions and plugin managers for those definitions. The \Drupal\Core\Block\BlockManager class defines the block plugins that need be located in the Plugin/Block namespace. It also defines the base interface that needs to be implemented along with the Annotation class, which is to be used when parsing the class's document block.

When Drupal's cache is rebuilt, all available namespaces are scanned to check whether classes exist in the given plugin namespace. The definitions, via annotation, will be processed, and the information will be cached.

Blocks are then retrieved from the manager, manipulated, and their methods are invoked. When viewing the Block layout page to manage blocks, the \Drupal\Core\Block\BlockBase class's label method is invoked to display the human-readable name. When a block is displayed on a rendered page, the build method is invoked and passed to the theming layer to be output.