If you mix a pound of sugar in a gallon of water, you'll get a gravity of ~1.045. If you add a second gallon of water, the amount actual sugar stays the same, but the volume changes, and the gravity will drop to ~1.0225. Specific gravity is basically a ratio representing density compared to water, so as more sugar is dissolved the gravity goes up, and more water added gravity goes down.
Fermentable ingredients (malts, extracts, sugars, etc) are usually represented (at least for homebrewers) in terms of "points per pound per gallon", as Yooper mentioned above. LME is usually ~35-36 ppg, DME usually ~44 ppg (which work out to the approximately 7 or 8.5 respective points per 5 gallons), common sugars (table sugar, corn sugar, etc) are usually ~45 ppg. Many malted grains are in the 30-37 ppg range but can vary widely, and then with grain there's extraction efficiency too (which varies from one brewer's equipment setup and process to the next) and the contribution from steeping grains is usually pretty small. But with sugars and extracts, 100% of the sugars make it into the wort (instead of a percentage that would be left out with grains). The lucky consequence of this is that with extract brewing, the gravity is directly based off of the volume that you have and the extract/sugars that you added. It makes it all but impossible to miss your gravity on an extract beer unless you either add/withold ingredients, or add/reduce volume.
