Basically, SAGD reduces the viscosity of the fluid by heating it and allows gravity to drain it downward toward a horizontal production well.

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The heat reduces the viscosity of the oil by increasing the thermal energy. Since the molecules have more kinetic energy the oil is less resistant to flow and can be pulled by gravity down towards the well.
The water also undergoes a thermodynamic process. As the steam enters the reservoir it begins to move towards equilibrium with the oil. Consequently, the steam decreases in temperature, condenses to become hot water and flows downward to be produced with the heated oil.
At the surface, the oil and water are separated and the water is recycled to be injected again as steam.