Can you explain the permissions model in relation to SharePoint?

I am in the process of interviewing for a new job and a big focus is knowing SharePoint. One of the things they are going to Ask me about is the SharePoint permissions model and understanding how you would apply them differently to a site vs a library.

As a systems administrator now I am aware of role based permissions but I am not sure how that applies to SharePoint. Since it’s a MS product I am sure I could just tie in into Active Directory user security groups and apply each group with just the rights that they need… but I am not sure if that’s what they are talking about.