Hierarchy is implemented by treating cells as node prototypes. Thus, in addition to primitive node prototypes (defined in the technologies) there are complex node prototypes, which are defined in the libraries. When placing an instance of a node, it doesn’t matter whether that instance’s prototype is primitive or complex. All that matters is that there is a node instance. This example shows how the “TwoGate” cell contains a primitive node (a transistor) and two complex nodes (“Gate” cell instances):

Ports on cell instances are defined in terms of ports on subnodes inside of the cell. A port on the subnode becomes an export on the cell. For example, if the cell “MyCircuit” has a transistor in it, then the gate port of that transistor can be made into an export on the cell, which then creates ports on instances of the “MyCircuit” cell. The port on instances of this cell will actually be the same as the gate port of the transistor inside the cell. Exports can be repeatedly exported up the hierarchy.

All together, you have a complex internal representation. The figure here shows four node prototypes: two primitives (Transistor and Contact in the CMOS technology) and two cells (Gate and TwoGate in the MyCells library). All but the TwoGate have port prototypes. Note that the port prototype on the Gate cell points (with a double-headed arrow) to the port instance inside of the Gate cell which is the source of the export.