Polishing removes scratches on the clear coat. The abrasive properties of car polish rub away the surrounding clear coat until it is level with the scratch itself, effectively removing the scratch.
Modern cars come with four paint layers:
It prevents corrosion and promotes paint adhesion.
It provides UV radiation resistance and an adhesive layer for the basecoat.
Primer
It gives the car its color.
Basecoat
This transparent layer protects the base coat against damage and gives the car a shiny finish.
Clearcoat