Translations fallback mechanism, by highest priority

1- Database

Translations are saved in translation table.
They are added using Inline translation feature or can be added manually.
Magento will load translations for the current locale

2- Themes

Translations are located in app/design/i18n folder.
Magento will merge all translations files found in the current theme and his parents for the current locale.

3- Language packages

Translations are located in app/i18n/[Vendor_Name]/xx_yy folder.
Magento will merge all installed language packages for the current locale.

4- Module

Translations are located in app/code/[Vendor_Name]/[Module_Name]/i18n folder.

Initialization

Magento\Framework\App\Area->_initTranslate()
Magento\Framework\App\Area->loadData()

$this->_loadModuleTranslation();

List all modules.
For each modules check if i18n/xx_YY.csv exists and add data to \Magento\Framework\Translate::_data

$this->_loadPackTranslation();

$this->_loadThemeTranslation();

$this->_loadDbTranslation();