I want to know how exactly does sqllite works when you are dealing with database on android. I know that it writes everything on file with .db extension. But how does it read or write one particular table? Does it fetch the whole file or just the related part and how exactly does it do these operations? Can someone please suggest me some link? I tried google but the links I found just explain how to write queries.
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SQLite operation on Android is not any different from SQLite operation on any other platform.
Very short answer to your question: SQLite file is split into pages of fixed size.
Each database object (table, index, etc) occupies some number of pages. If objects needs to grow (like new rows are inserted into table) it may allocate more new pages either from free page list, or by growing database file in size. If rows are deleted or object dropped, reclaimed free space goes into free page list. During any operation, SQLite engine tries to NOT fetch whole file, however it maintains page cache for higher performance.
You can find much more detailed explanations on SQLite website in general, and about SQLite database file format in particular.