It uses the various python client libraries to make REST API calls to them using your Keystone token. Basically exactly what you would do from the command line yourself.

The configuration objects you use in a Heat template are registered with the Heat engine and map to a Python object that carries out the necessary processing, including, in this case, calling the Nova API to create the instance.

Check out https://github.com/openstack/heat/blo... for the implementation code of this particular object, and note the code at the bottom of the file that registers the mapping:

def resource_mapping():
    return {
        'OS::Nova::Server': Server,
    }