This basically inserts each element of the into its proper position . The first two elements are put in sorted order ; after that the first three elements are put in order .. and this goes on progressively .

eg. 8,2,4,3,1

First focus on just 8,2 ( first 2 elements )  ;  2 needs to be placed before 8 

=> 2,8,4,3,1 

Now focus on 2,8,4 ( first 3 elements ) 

4 needs to be placed between 2 and 8 

=> 2,4,8 ,3,1

Focus on 2,4,8,3 ( first 4 elements )

Move 3 between 2 and 4 

=> 2,3,4,8

... and so on .

This is an example of dynamic programming . The parts of the problem of smaller size are solved first . And we keep incrementing on this solution .

When you are considering the first X elements 

We already know that the first X-1 elements are sorted . 

So you only need to bring down the X-th element into its correct position , and all the elements after will have their indexes incremented by 1 .