There are several libraries like ncurses that assist in making command-line GUIs.
Simply put, how do they work?
My first thought was that ncurses intercepts
curses (and ncurses, too, I think) works by moving the cursor around on the screen. There are control sequences to do such things. Take a look at the code again and you'll see them. These sequences are not ASCII control characters, they are strings starting with (umm...) ESC, maybe. Have a look here for a higher-level explanation.
Text terminals have command sequences that do things like move the cursor to a particular position on the screen, insert characters, delete lines etc.
Each terminal type is different and has its own set of command sequences. ncurses has a databse (see terminfo for details)
Internally ncurses maintains 2 views of the screen: the current contents and what the screen should look like after the current pending changes are applied. Once the program requests a screen redraw, ncurses calculates an efficient way to update the screen to look like the desired view. The exact characters/command sequences output depend on what terminal type is in use.