The database maintains relationships between records using record IDs. Record IDs are only available after the record is inserted. This means that the related records, such as child object records, need to be inserted in a specific dependency order. Parent records should be inserted before child records, and the parent record IDs are used to populate the relationship (lookup) fields on the child record objects before they can be inserted.
The common pattern for this is to use the List or Map keyword to manage records inserted at a parent level, in order to provide a means to look up parent IDs, as child records are built prior to being inserted. The other reasoning for this is bulkification; minimizing the number of DML statements being used across a complex code path is vital to avoid hitting governor limits on the number of DML statements...