Why is a level of indirection needed for this concatenation macro?

I found an interesting little blog post that explains how to generate (semi) unique names in a macro by using the line number:

// Do magic! Creates a unique name using the line number
#define LINE_NAME( prefix ) JOIN( prefix, __LINE__ )
#define JOIN( symbol1, symbol2 ) _DO_JOIN( symbol1, symbol2 )
#define _DO_JOIN( symbol1, symbol2 ) symbol1##symbol2

There are two things here that really confuse me:

1. Why does the LINE_NAME macro even work if JOIN is declared after it in the file? I thought the C preprocessor did a linear pass, and thus would need the macros to be defined based on dependency, just like C functions need to be defined before they're used.
2. Why is it necessary to use both the JOIN and _DO_JOIN macros in order to get the correct result? Having this level of indirection in the macros seems very strange.

I have a feeling that the answers to both those questions are related, and have to do with the way that the C preprocessor evaluates macros. (However, my intuition on how macros work is apparently way off since I didn't even think that the example was valid.)

Why does the LINE_NAME macro even work if JOIN is declared after it in the file?

Macros are not functions, when you call them compiler expands them at compile-time right in the line it is compiling. It is where the compiler knows all about the macro.

Why is it necessary to use both the JOIN and _DO_JOIN macros in order to get the correct result? Having this level of indirection in the macros seems very strange.

Because __LINE__ itself is a macro, it needs two level expanding.

Otherwise the output is not prefix1234 it will be prefix__LINE__.

it's useful to read this answer too, and this thread.