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I am unable to make a connection with a lot of concepts , like the activity/fragment stacks, their lifecycle callbacks , the continuous running ui loop and processes
I would interpret that to mean they want you to explain the app lifecycle.
Build shit. Don't read shit.
If an interviewer asked me "How an app works", then the only correct answer imho is to ask them what the hell they're on about. In interview speak of course:
"Sure, but that's very broad - what area would you like me to cover? I can go into the app lifecycle, layers between the user and the hardware, frameworks typically used to build an app, or something else entirely?"
If in doubt, clarify.