Each base shape has an invisible vector associated with it. The vector determines how the base shape will be transformed from the current iteration to the next iteration. The vector itself will also be transformed, so the effects "accumulate." When using the applet you can see the vector by clicking "show vector" at the bottom of the control panel.

Lets use the example of the Mangbetu square. The vector's "anchor" is at the bottom corner. A single iteration can be seen as the following 4 steps:
 

1) Make a copy of the current base shape, and superimpose it over the same location.	Anchor at green dot
2) Translate the copy in the direction of the vector. The distance is determined by the % of the vector length specified by the user. The distance is measured from the original vector anchor to the copy's vector anchor.	50% translation
3) Scale the copy with respect to its vector's anchor point--in other words, as the copy shrinks down, the copy's anchor point is does not move. The scale% is the same in X and Y directions.	50% scale (0% translation)
4) Rotate the copy with respect to its vector's anchor point.	45 degree rotation

Other base shapes with their vectors: