It is a standard, structured way to convey the meaning of information, going far beyond exchanging the simple characters and data. The DTD means the same in any application, allowing exchange between systems that speak SGML Hierarchy Document contents, as identified by elements, are governed by hierarchal rules. Thus, the document itself has a tree structure.
Hierarchy allows full path of the tree to constitute element's identification for processing.
Simple tree structures can be conceptualized as fields within records, with the upper nodes seen as different relations.