Author-it uses Auto Headings to automatically create the correct topic heading levels for its outputs. Author-it determines which heading style to use based on a topic's position in the book hierarchy. The same topic can be at a different levels in different books, but its heading would still be formatted properly.
This property is usually inherited by the topic template on which you've based your topic. This way, your topics will have consistent properties.
There are cases where you'll set a specific style, instead of Auto Headings. For example Appendix topics always use the Appendix heading style and not Heading 1 and Heading 2 styles.