When the sugar solution is heated, the water boils away and the sugar concentration increases along with the temperature. As Harold McGee points out it seems somewhat contradictory that in candy making sugar is first mixed with water and then heated to in order to boil the water away. This is important because it allows the sugar to be heated at high temperatures without burning.
Before there were candy thermometers candymakers had their own visual way of figuring out if the sugar syrup had reached the correct temperature. These different stages that occur when heating the solution are based on how the solution behaves when some of the mixture is put into cold water. The following is taken from Science of Candy and Baking 911.com. (http://www.baking911.com/candy/chart.htm).If you look at the web site: Science of Candy (http://wwwexploratorium.edu/cooking/candy/sugar-stages.html) there are photos and video that show each stage of the heating of a sugar solution.
Thread Stage: 230 º F-235 º F; sugar concentration is 80%
A lot of water still remains in this syrup. You might use the syrup to cover ice cream
Soft-Ball Stage: 235 º F- 240º F; sugar concentration is 85%
Sugar syrup will form a soft, flexible ball. If you remove the ball it will flatten in your hand like a pancake. Fudge, pralines, fondants are cooked at this stage.
Firm-Ball Stage: 245 º F- 250 º F; sugar concentration is 87%
Sugar forms a firm ball that won't flatten when taken out of water, but remains malleable and will flatten when squeezed. Caramels are cooked in this stage.
Hard-Ball Stage: 250º F-265 º F; sugar concentration is 92%
Sugar forms thick threads as it drips from a spoon. Sugar concentration is high which means there is less moisture. The mixture forms a hard ball when dropped into cold water. The ball will not flatten when taken out of the water. The ball will stay hard but you can change its shape by squashing it. Nougats, marshmallows, gummies, divinity, and rock candy are cooked in this stage.
Soft-Crack Stage: 270 º F-290 º F; sugar concentration is 95%
At this stage bubbles on top become smaller, thicker, and closer together. Moisture content is low. Dropped into cold water this syrup solidifies into threads that are flexible not brittle. They will bend slightly before breaking. Saltwater taffy and butterscotch are cooked to this stage.
Hard-Cracked Stage: 300 º F-310 º F; sugar concentration is 99%
This is the highest temperature that is usually seen in candy recipes. There is almost no water left in the syrup. Dropped into cold water the syrup will form hard, brittle threads that break when bent. To avoid burns, the syrup should cool in the cold water a few moments before touching it. Toffee, nut brittles, and lollipops are all cooked to this stage.
If the syrup is heated to a higher stage you will be on the way to creating carmelized sugar (the brown liquid stage) - which is added to many desserts.
Clear-Liquid Stage 320 º F; sugar concentration is 100%
Water has all boiled away at this stage. The remaining sugar is liquid and a light amber color
Brown-Liquid stage 338 º F; sugar concentration is 100%
The liquefied sugar turns brown due to carmelization. The sugar is beginning to break down and form more complex compounds that give the syrup a richer flavor. This is used for dessert decorations and also to candy coat nuts.
Burnt-Sugar Stage; sugar concentration is 100%
Above 350º F the sugar begins to burn and has a bitter, burnt taste.