I’m going to take a slightly more technical approach to this: our “degree of understanding” something depends on how that concept is encoded in our minds, what other concepts it is linked to, and how it is linked to them.

Let’s consider an example: what does a novice VS a basketball coach see when they watch a basketball game?

The novice sees ten people running around chaotically. Eventually someone puts the ball through the hoop (this is the most exciting part for the novice).

In comparison, the coach sees a series of patterns: a simultaneous down/cross screen to set up 2 offensive options, followed by a pick-and-roll to attack. One of the offensive options pays off and the team scores from a weakly defended area. In this case, the least exciting part was putting the ball through the hoop; all the interesting action took place beforehand.

So what’s the difference? Explained in psychological terms:

1. The first difference lies in how they encoded (interpreted) the scene. The coach, having lots of knowledge about basketball formations (declarative knowledge), and lots of practice watching games, is able to pick out important patterns in real time (procedural knowledge). The novice doesn’t know these patterns. And even if they did, they probably would not be able to process the scene quickly enough. If you asked them later to describe what happened, the coach would be able to recall the positions of most of the players since they were arranged in a meaningful way. The novice could only give a fragmented description since everything was a disorganized mess in his mind.
2. The second difference lies in how the encoded stimulus is linked to other concepts. The coach doesn’t just see a simultaneous screen. He sees the possibility that a shot may open up. He understands that, if the point guard attacks a certain way, the team can take advantage of that opportunity. In other words, he knows all the implications of what he sees. In contrast, even if someone told the novice that a double screen had happened, they wouldn’t know what significance it had.

So the big difference between an expert and a novice is encoding and linked concepts. This applies to many fields. E.g. in chess, experts are able to recall whole boards by seeing them in terms of defensive/offensive patterns, while novices can only recall a few pieces. In electrical engineering, experts are able to recall large circuit boards and understand their interactions, novices can’t. Same with dance, music, math, business, driving, etc. In each case, the expert has a highly elaborated mental model of their field which they can bring to bear on the current stimulus.

So what does it mean to truly understand something? It means that you’re able to recode what you see from disorganized chaos into orderly patterns, and from those orderly patterns extract meaning (implications).

How do you gain it? To truly understand something (e.g. a basketball game, a song, a business) you need to know what the important relations are between the patterns that make up that thing (offensive plays, chord progressions, revenue streams), and their wide reaching implications. The more patterns you can identify, the more inferences you can make based on those patterns, the more predictions you can make based on that knowledge, the deeper your understanding of that thing.