[Django]-How does manage.py work?

You need to look in the django.core.management package; the execute_from_command_line() function accepts the sys.argv command line parameters and takes it from there.

When you enter manage.py startapp xyz on the command line, sys.argv is set to ['manage.py', 'startapp', 'xyz'].

These are handed off to a ManagementUtility instance, which has a .execute() method to do the actual parsing.

The whole django.core.management package is modular; the .commands sub package contains the various standard commands for the manage.py tool. django.core.management.commands.startapp handles the startapp subcommand, for example.