Boxes 1 to 3 are positioned according to the normal flow.
Boxes 2 to 3 are positioned according to the normal flow, but box one has a position attribute with a left value of 300 pixels and a top value of 500 pixels. Because the position is absolute, it doesn't relate to any other elements on the page.
Again, boxes 2 to 3 are positioned according to the normal flow, but box one has a position attribute with a left value of 100 pixels and a top value of 800 pixels. Because the position is absolute, it doesn't relate to any other elements on the page.
Note that the posisitons are all expressed from the left and the top of the viewport. When box 1 is moved, the other boxes move to occupt the space that it created by taking itself out of the normal flow of elements.