Question relating to how wordpress works

I’m working on a local copy of a friend’s site. As I understand it this is (roughly) what happens after you put in the address of your wp site and hit enter:

– Index.php in the root/wordpress folder tells the theme to get going
– Another Index.php in the wp-content/themeName folder loads the header, loops through the posts to display, and then loads the footer.

In the site I’m working on Index.php appears to be ignored in favor of a creation of whoever first created the site: homepage.php. It does much the same thing, except it doesn’t loop through posts.

My question is: What determines the “initial” file to be used in the theme’s folder, i.e. in my own site what is saying “use homepage.php” as opposed to “use index.php”. When looking at the root/wordpress folder’s index.php nothing jumps out at me there.

Another, tangential question: When using PATHINFO permalinks which index.php is being referred to in the list of choices: the wordpress folder’s or the theme folder’s ?

Apologies if the above makes little or no sense, not really up on the technical side of WP as you may have guessed!