In our early history, human beings banded together in groups in order to survive. As a group, we were able to defeat large predators and became the top of the food chain on this planet. Being part of a group has been essential to who we are, and how we live.
Within a group, it is, and has always been important to know who is our friend who will share food and protection, and who is our enemy who will steal from us and cause us harm.
In order to make these judgements, we have developed a high sensitivity to body language, emotional intention in others, and hidden meanings behind speech. Most of these processes seem to be outside of our ordinary awareness and happen without conscious application.
I believe that the way we read other people is also the way we read books.
The reader scans the page and tries to interpret what is the true intent behind the external form of dialogue. The same thing happens when they read action and description. There is an expectation that everything on the page is more than what it appears.
This is why all dialogue must have a subtext, exposition needs to be delivered in sometimes subtle and dramatic ways, and the world needs to be shown not told on the page.
We navigate the world on the page the same way we navigate the world we live in.
This is also the way, if done well, the world on the page becomes almost as real as the world we live in.