The metric system uses a set of base units and prefixes to denote multiples or fractions of the base units. The base units are the meter for length, liter for volume, and gram for mass. Prefixes denote powers of 10, so moving one "step" to the left or right in the prefix diagram corresponds to moving the decimal place one position in conversions between units. For example, 1 meter = 10 decimeters = 100 centimeters. The document provides examples of converting within the metric system using this concept of moving the decimal place for each prefix "step."