For the detail, how does it work you should read the interface man page, but I will include a fragment of the man page here.
Lines beginning with "source" are used to include stanzas from other files, so configuration can be split into many files. The word "source" is followed by the path of file to be sourced. Shell wildcards can be used. (See wordexp(3) for details.)On Debian variant system there is a specific dictionary to save interface file configuration "/etc/network/interfaces.d" you can store every single file interface configuration into that folder, and recall that configuration file on "/etc/network/interfaces" file using "source" command.
iface lo inet loopback
iface eth0 inet static